New York City Council launched an investigation into four crypto and prediction market platforms over allegations of deceptive and abusive marketing tactics targeting young users, according to an announcement posted August 12.
The inquiry covers Kalshi, Polymarket, Coinbase and Gemini. Council members are examining whether the platforms made false or misleading claims in their promotional efforts and whether influencer marketing campaigns violated consumer protection standards. The scope centers on practices specifically directed at younger audiences.
Prediction markets have expanded significantly in the United States over the past two years, with platforms like Polymarket and Kalshi gaining retail adoption. Kalshi is a commodity exchange registered with the Commodity Futures Trading Commission; Polymarket operates as an offshore platform accessible to U.S. users through VPNs and wallet connections. Coinbase and Gemini are established cryptocurrency exchanges that have added various trading products and services.
The investigation occurs as crypto marketing in major U.S. cities faces growing scrutiny. New York's Department of Financial Services has maintained an active stance on crypto regulation, and the City Council has previously examined exchanges and custody providers on consumer protection grounds. This marks one of the first formal city-level reviews of prediction market operators' promotional conduct.
Marketing practices in the crypto sector have drawn criticism from consumer advocates and regulators. Influencer endorsements and social media campaigns promoting trading platforms have proliferated, particularly on platforms popular with younger demographics. The Council's focus on youth-targeted marketing aligns with federal concerns about access to derivatives products by less experienced investors.
Kalshi and Polymarket have both grown user bases substantially since 2024, with Polymarket claiming millions of users by mid-2026. Coinbase and Gemini have long-established customer bases and regulatory relationships, though both have faced separate inquiries from state and federal authorities on different matters.
The Council investigation does not yet specify enforcement mechanisms or timelines. It remains unclear whether findings could result in fines, marketing restrictions, or other remedies, or whether the city would pursue legislation specific to prediction markets and crypto exchanges operating within New York.
The number of formal investigations into crypto platform marketing conduct at the municipal level remains limited; most enforcement activity has originated from state financial regulators or the Federal Trade Commission. The outcome of New York's inquiry could set a precedent for how cities assess marketing practices in the prediction market and crypto trading sectors.
