The company behind the OG exchange, which is linked to Crypto.com, has filed a lawsuit against officials in Washington State. This legal action comes before the state can take steps to regulate or shut down its prediction markets. The company claims federal laws governing commodities trading shield it from Washington’s gambling regulations and points to a previous case where the state successfully blocked similar services offered by Kalshi as a sign of what’s to come.
Key Takeaways
- OG seeks a permanent federal injunction against Washington gambling enforcement.
- The exchange says Washington’s July 20 Kalshi injunction creates an imminent threat.
- OG invokes the CFTC’s July 14 order protecting completed Michigan event contracts.
OG invokes CFTC’s Michigan intervention
North American Derivatives Exchange Inc., which does business as OG Prediction Markets and Crypto.com | Derivatives North America, filed a federal lawsuit Wednesday seeking to prevent Washington officials from applying state gambling laws to its event contracts. The CFTC-regulated exchange named Attorney General Nick Brown and members of the Washington State Gambling Commission as defendants in the Western District of Washington.
OG is the standalone prediction-market platform launched by Crypto.com on Feb. 3. The platform offers sports, political, financial, cultural and entertainment contracts through the exchange Crypto.com markets as Crypto.com | Derivatives North America, an affiliate registered with the Commodity Futures Trading Commission as a designated contract market and derivatives clearing organization.
The lawsuit does not follow a cease-and-desist order or enforcement case against OG. Instead, the exchange says Washington’s public position and its recent injunction against Kalshi create a “concrete and imminent threat” that officials will target OG next. Washington has maintained since December 2025 that offering or participating in event-contract markets is unauthorized within the state.
OG is asking a federal court to rule that Washington state’s gambling laws are invalid and shouldn’t apply to its operations. They also want a permanent order preventing certain officials from enforcing those laws against them. However, OG hasn’t yet received any temporary or preliminary legal protection in this case.
From my analysis, the core of this dispute centers on the idea that Congress specifically empowered the CFTC to oversee trading on major exchanges, aiming for a consistent, nationwide system for derivatives. OG contends that leaving Washington would severely harm their revenue, put them at a disadvantage compared to other exchanges, and lead to a fragmented regulatory landscape that clashes with their federal responsibilities. Essentially, they believe state-by-state rules would be unworkable given the existing federal framework.
Its complaint relies heavily on the CFTC’s July 14 intervention in Michigan. The agency blocked Kalshi from cancelling previously executed sports contracts after a state court ordered them voided and refunded, directing the exchange to fulfill the trades normally. The CFTC said forced unwinding could distort prices and weaken confidence that completed derivatives transactions will remain enforceable.
OG also suggests sports contracts could be used as a financial tool. They argue that companies like broadcasters, merchandise sellers, hotels, restaurants, and fantasy sports sites might use these contracts to reduce risk related to how sporting events turn out. However, the argument relies on potential examples and doesn’t show any businesses currently using them this way.
The exchange previously sued Nevada regulators in September 2025 after receiving a cease-and-desist, and a federal judge denied its preliminary injunction the following month, prompting Crypto.com to pause Nevada sports contracts and appeal to the Ninth Circuit. In June, it filed a near-identical complaint against New York Attorney General Letitia James and the New York State Gaming Commission. OG is also the second operator to sue Washington on imminent-threat grounds, after Robinhood.
Washington’s state court reached the opposite conclusion in Kalshi’s case, finding that the Commodity Exchange Act does not prevent states from defining and enforcing illegal gambling. Federal courts remain divided: the Third Circuit shielded Kalshi in New Jersey, while courts in several other states have allowed local restrictions to proceed. Gambling attorney Daniel Wallach counts states winning 19 of 23 decisions on preliminary injunctions and restraining orders in prediction-market cases.
OG is suing in federal court to try and prevent Washington state from taking action against them like they did with Kalshi. While the lawsuit doesn’t clarify if their contracts are considered financial derivatives or gambling, it does bring the debate over regulatory authority – who oversees these markets, the federal government or individual states – to Crypto.com’s growing prediction market platform.
2026-07-25 12:58