Crypto.com and Washington state officials want to put their federal court fight over event contracts on hold while the Ninth Circuit weighs appeals that could resolve the key legal question between them.

North American Derivatives Exchange Inc., which does business as OG and is referred to here as Crypto.com, filed the joint request Tuesday (August 18) with Washington Attorney General Nicholas W. Brown and officials from the Washington State Gambling Commission.

If the court approves the arrangement, state officials would temporarily hold off on certain civil or criminal enforcement involving Crypto.com and event contracts traded on federally regulated Designated Contract Markets, known as DCMs.

Both sides say continuing the Washington litigation now could waste time and money when the appeals court is already considering the same underlying question. They agreed that “good cause exists to grant their requested relief to prevent unnecessary expenditure of judicial resources and the Parties’ resources while the related issues are before the Ninth Circuit.”

Crypto.com brought the Washington case on July 22, challenging the possibility that state officials could enforce Washington gambling and consumer laws against its event-contract activity.

Crypto.com contends federal regulation under the Commodity Exchange Act displaces state law for contracts traded on DCMs. The filing says the company “has alleged that all state laws are preempted as they relate to trading of event contracts on DCMs” because of the federal law.

Ninth Circuit Crypto.com ruling could determine whether federal law overrides Washington gambling rules

Three Nevada cases involving North American Derivatives Exchange, Kalshi and Robinhood Derivatives LLC are already before the Ninth Circuit. Briefing is complete, and judges heard arguments April 16. The Washington parties say those cases raise the same federal preemption question.

While the pause remains in place, Washington officials would refrain from enforcement under the Consumer Protection Act, Gambling Act, Recovery of Money Lost at Gambling Act and other state laws tied to Crypto.com’s DCM event-contract transactions. The federal case would also be administratively stayed.

After the relevant Ninth Circuit proceedings end, both sides would meet within 10 days to discuss what happens next. Unless they reach another agreement, they would submit a status report within 20 days outlining how they believe the appellate ruling changes the Washington case.

The proposal would not end their wider disagreement. As the filing states, “this stipulation does not resolve any claim or defense asserted in this action.”

The dispute comes amid a wider fight over who regulates prediction markets. Washington’s Gambling Commission said in December 2025 that event-based prediction markets were unauthorized in the state. In July, a coalition of 44 state attorneys general also urged the Commodity Futures Trading Commission to withdraw and rewrite a proposed prediction-markets rule, arguing sports wagering remains primarily a state responsibility.

The agreement includes an 18-month backstop. If no further court order arrives by then, Washington officials could leave the arrangement after giving Crypto.com 14 days’ written notice.

The parties submitted the stipulated motion and proposed order to U.S. Magistrate Judge Brian A. Tsuchida.

Featured image: Crypto.com / Canva

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