Crypto.com, operating as a North American Derivatives Exchange (NADEX), has filed a lawsuit in federal court against the Nevada Gaming Control Board (NGCB), challenging its efforts to block the platform from offering financial contracts tied to sports outcomes.

The lawsuit comes in response to the NGCB’s warning that such contracts fall under Nevada’s strict gambling laws and could only be offered by licensed sportsbooks.

Crypto.com says sports derivatives are financial products, not gambling

Crypto.com argues that its sports-related derivatives are regulated financial products—not gambling activities—and should not be subject to gaming oversight.

These contracts, similar to futures in traditional finance, allow users to speculate on events like team performance or league outcomes, offering a new form of market participation.

The exchange claims the NGCB’s stance infringes on federal law governing derivatives and hampers innovation in financial products.

By filing suit, Crypto.com aims to clarify the regulatory distinction between financial instruments and gambling, potentially setting a legal precedent for the broader crypto and fintech industries.

The outcome of the case could have far-reaching implications for companies seeking to merge sports data, blockchain technology, and finance, especially as interest in tokenized predictions and alternative financial products continues to grow in the U.S.

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Crypto.com offers regulated sports-based financial contracts

Crypto.com, which operates a federally regulated derivatives exchange, offers contracts that let people speculate on sports outcomes—similar to financial futures.

These contracts fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) through the Commodity Exchange Act.

Crypto.com argues that only the CFTC has the authority to oversee these financial products.

However, the Nevada Gaming Control Board (NGCB) contends that such contracts resemble sports betting and should comply with Nevada’s strict gambling laws.

Crypto.com disagrees, claiming the NGCB is overstepping its authority and trying to regulate something outside its legal scope. The company believes federal law overrides state rules in this case and that the NGCB’s interference is unlawful.

Crypto.com is now asking a federal court to confirm that the CFTC has sole regulatory power over these contracts and to block the NGCB from disrupting their business operations in Nevada.

Crypto.com says Nevada block would harm business and user trust

Crypto.com argues that blocking users in Nevada would cause irreparable damage to its business by cutting off access to a key market and undermining customer trust.

The company emphasizes that such disruption would be difficult to recover from. To strengthen its position, Crypto.com points to recent court rulings involving KalshiEX, another firm offering similar contracts.

In those cases, judges affirmed that the Commodity Futures Trading Commission (CFTC) holds exclusive authority under federal law, overriding state-level gambling regulations. These precedents support Crypto.com’s claim that Nevada’s Gaming Control Board has no legal right to interfere with federally regulated financial contracts.

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