Two California investors are taking Crypto.com to federal court in Miami, Florida, accusing the company of running what they describe as a nationwide sports betting business under the cover of financial trading.
The proposed class action, filed in the U.S. District Court for the Southern District of Florida, names North American Derivatives Exchange Inc., which operates as Crypto.com, along with Foris DAX Inc. The lawsuit claims users across the country have lost hundreds of millions of dollars through the platform’s sports event contracts.
Kamana Keohohou of Palm Springs and Nicholas Evans of Benicia say the company’s “Sports Event Trading” feature is, in reality, straightforward sports gambling packaged as a regulated derivatives product.
Crypto.com rolled out the feature in December 2024, giving users the option to purchase “event contracts” linked to the outcome of sporting events. The company has marketed the offering as a “CFTC-regulated derivatives product” and told users they can “[t]urn correct predictions into profit with Sports Event Trading, now available across the US,” according to the complaint.
According to the lawsuit, the mechanics look no different from a typical sportsbook. Users answer “yes” or “no” to questions such as which team will win. A correct pick earns a set payout, while a wrong one means the user loses the price paid for the contract.
The plaintiffs also point to the company’s own learning materials. In a glossary aimed at new users, Crypto.com explains: “[w]hen you buy a contract on Predict, you’re essentially placing a bet on your prediction about the occurrence, non-occurrence, or extent of the occurrence of a specific event…”
Why the Crypto.com lawsuit in Florida claims the product is illegal
At the center of the case is the argument that sports betting is largely controlled by state law, regardless of any federal derivatives framework. The plaintiffs contend the platform runs afoul of the laws in more than two dozen states, including California, where they live, and Florida, which Crypto.com names in its terms as the governing law and venue for disputes.
Florida law voids gambling contracts unless the activity is specifically authorized. The complaint asserts that Crypto.com’s sports event contracts do not fall within any approved category in the state.
In California, the suit cites longstanding bans on bookmaking and wagering on contests of skill. It also references a July 3, 2025, opinion from the California Attorney General concluding that daily fantasy sports games amount to unlawful sports wagering under state law.
The filing further claims that after the contracts launched, the Commodity Futures Trading Commission said in January 2025 that it was reviewing two self-certified event contracts and asked the company to pause trading during a 90-day review. The lawsuit says Crypto.com responded that it would keep offering the contracts nationwide.
Regulators elsewhere have also taken action. Connecticut officials recently ordered Crypto.com, along with Kalshi and Robinhood, to stop offering what the state called unlicensed sports wagering products. In Nevada, a federal judge declined to block certain event contracts, though the decision drew attention for its reliance on arguments raised in a tribal amicus brief rather than directly addressing swaps law.
Keohohou says he lost at least $1,200 using the platform, and Evans claims losses exceeding $800. Both say they would not have participated had they understood the activity was allegedly illegal in California.
The lawsuit seeks certification of a nationwide class of U.S. users who lost money on the contracts, along with a California subclass. The plaintiffs are asking for a jury trial.
Featured image: Crypto.com / Canva
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