Crypto.com, through its North American Derivatives Exchange entity, and Novig, via Ludlow Exchange LLC, filed separate federal lawsuits against Missouri officials on October 16, 2026. The legal action comes in response to cease-and-desist orders issued by Missouri Attorney General Catherine Hanaway in September 2026.
Hanaway’s warning letters targeted six prediction market operators: Kalshi, Polymarket, Robinhood, Underdog, Crypto.com, and Novig. As of Sunday, however, only Crypto.com and Novig have chosen to fight back in court.
This jurisdictional clash pits local gambling regulations directly against federal commodities oversight.
Federal Commodity Contracts Versus Sports Betting Rules
At the core of both platforms’ defense is the federal Commodity Exchange Act under the jurisdiction of the Commodity Futures Trading Commission (CFTC). Because prediction market contracts fall under the mandate of the federal commodities regulator, they argue Missouri lacks the authority to regulate them as sports betting.
Crypto.com launched its OG prediction market platform in February 2026, offering prediction contracts across sports, finance, and culture. In her warning letter, Hanaway alleged that the platform allowed 18-year-old users to trade sports contracts, conflicting with Missouri regulations setting the minimum betting age at 21.
Beyond jurisdictional disputes, Crypto.com cited an administrative error by the attorney general’s office. Hanaway’s warning letter was misaddressed to Foris DAX Inc. rather than North American Derivatives Exchange, the registered operator.
Licensing Requirements Impossible to Meet at the State Level
Missouri requires sports betting operators to hold a dedicated license and pay a 10% tax on gross receipts. For Crypto.com and Novig, the local licensing process hits a dead end: Missouri only offers two direct mobile sports betting licenses, and both have already been awarded. With no remaining quota, applying for a new license is impossible for contract exchanges.
The lawsuits were filed in two separate courts. Crypto.com filed its complaint in the U.S. District Court for the Western District of Missouri, while Novig filed in the U.S. District Court for the Eastern District of Missouri under case number 4:26-cv-01780.
Lawsuits to Block State-Level Enforcement
Through their separate legal proceedings, both plaintiffs are seeking declaratory judgments along with permanent injunctions against Missouri officials. A court ruling is sought to prevent state authorities from enforcing local gambling statutes against prediction market operations.
For prediction market participants, the outcome in Missouri will help clarify whether trading commodity contracts risks running afoul of state gambling laws or remains shielded by federal regulations.
Reported via crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
