Arizona Attorney General Kris Mayes filed criminal charges against Kalshi Tuesday, charging the prediction markets platform with operating an unlicensed gambling business and offering election wagering in the state, actions she said violated the state’s laws.

Mayes charged KalshiEx LLC and Kalshi Trading LLC with 20 counts, alleging the platform accepted bets from Arizona on a wide range of events in violation of Arizona law, including sports and elections, like contracts betting on the outcomes of the 2028 presidential race and 2026 state gubernatorial race.

“Arizona law prohibits operating an unlicensed wagering business, and separately bans betting on elections outright,” the attorney general said in a statement.

The charges come just days after the Commodity Futures Trading Commission (CFTC) signaled a more supportive federal stance toward prediction markets, issuing new guidance and launching a rulemaking process under Chairman Mike Selig.

That effort asserted the CFTC’s “exclusive jurisdiction” over event contracts and frames platforms like Kalshi as regulated derivatives venues rather than gambling operators, setting up a direct clash with states such as Arizona that continue to treat sports and election-related contracts.

“Sadly, a state can file criminal charges on paper thin arguments,” a Kalshi spokesperson said in a statement. “States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it. As other courts have recognized and the CFTC affirms, Kalshi is subject to federal jurisdiction. It’s different from what sportsbooks and casinos offer their customers, and it should not be overseen by a patchwork of inconsistent state laws.”

Different courts have ruled in different ways on whether prediction market providers are subject to state laws. A federal judge in Nevada ruled last year that the company’s sports-related contracts are subject to state gaming regulators. A Massachusetts state court similarly found that sports-related conduct might be subject to state regulations in that state. A federal judge in Tennessee ruled the other way earlier this year, at least temporarily blocking state regulators from enforcing a cease-and-desist against Kalshi.

Notably, most of these contracts and cases were related to sports gambling, and not election-related bets, as Arizona’s case is.

In her statement, Mayes said, “Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections.”

She added that state law prohibits both unlicensed wagering businesses and betting on elections outright.

The charges escalate a widening legal fight between Kalshi and state regulators. The company sued Arizona on March 12 in a preemptive move, part of a broader strategy that has recently included litigation against Iowa and Utah, Mayes’ filing added. Arizona officials also criticized the approach, saying Kalshi is attempting to bypass state-level gambling rules by turning to federal courts.

“Kalshi is making a habit of suing states rather than following their laws,” Mayes said. “In the last three weeks alone, the company has filed lawsuits against Iowa and Utah, and now Arizona.”

Mayes criticized Kalshi saying that instead of operating within the legal frameworks such as Arizona’s, “Kalshi is running to federal court to try to avoid accountability.”

The filing also cited a recent federal court setback for Kalshi in Ohio, where a judge denied the firm’s request for a preliminary injunction and affirmed the state’s authority to enforce its gambling laws.

Kalshi has positioned its event contracts as federally regulated derivatives rather than gambling products, a distinction now being tested across multiple jurisdictions.

Crypto trading and investment company GSR has acquired advisory companies Autonomous and Architech in a $57 million deal to expand its services for tokenized projects, combining launch support, treasury management and capital markets infrastructure under one platform.

The acquisition brings together Autonomous’s operational and financial services for token launches with Architech’s focus on token design and liquidity strategy, integrating both into GSR’s existing trading, market-making and asset management business.

To be sure, many crypto projects face challenges due to their reliance on different providers for structuring, token economics, fundraising, and exchange listings, which can lead to inefficiencies and a lack of coordination, according to Philipp Maume and Mathias Fromberger, writing recently in the Chicago Journal of International Law.

GSR said that its platform will provide treasury services, including liquidity planning, risk management and capital allocation for digital asset reserves.

Architech, founded in 2024, has advised on token launches with a combined peak fully diluted value of more than $10 billion, according to the company. Autonomous provides treasury operations, financial management and coordination with exchanges, custodians and market makers.

Autonomous will continue operating under its existing brand within GSR, while Architech will be integrated into a new digital asset advisory unit.

Related: Mastercard agrees to acquire BVNK in $1.8B stablecoin deal

From ICOs to structured token launches

Token fundraising in crypto has shifted significantly since the initial coin offering (ICO) boom of 2017 and 2018 saw projects raise capital directly from retail investors with minimal coordination across service providers. Today, token launches are often structured through private funding rounds, followed by coordinated exchange listings and liquidity provisioning.

Projects such as Monad raised $225 million in 2024 in a funding round led by Paradigm ahead of a planned token launch.

In November, Coinbase launched a platform for regulated primary token offerings, giving US retail investors access to token sales with compliance requirements, lockups and controlled distribution. The platform debuted with the token sale from Monad, marking one of the first broad opportunities for US retail investors to participate in public token sales in recent years.

Projects are also experimenting with new issuance models tied to broader financial strategies.

Crypto exchange Backpack said its planned token distribution will be linked to business milestones and a potential IPO, with a portion of supply managed within a corporate treasury. In February, the company was reportedly in talks to raise $50 million at a $1 billion pre-money valuation.

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