Shares of Coinbase Global and Gemini Space Station slid after New York's attorney general sued the cryptocurrency exchanges, alleging their prediction markets break the state's gambling laws.

Coinbase's stock declined 7.4% to $195.95 on Tuesday. Shares of Gemini fell 3.6% to $4.5.

The lawsuits, filed by New York Attorney General Letitia James on Tuesday, said the platforms' prediction markets fit the legal definition of gambling in New York given they allow users to bet on events-including sports, entertainment and elections-with uncertain outcomes.

The complaints allege the platforms thus violate New York laws since Coinbase and Gemini haven't obtained a license from the New York State Gaming Commission, and because their prediction markets are available to users between the ages of 18 and 20, below the legal gambling age of 21.

"Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution," James said in a statement.

The suits seek court orders that would require Coinbase and Gemini to pay fines, forfeit illegal profits and pay restitution to customers.

Coinbase Chief Legal Officer Paul Grewal said prediction markets are federally regulated national exchanges, and registered with the Commodity Futures Trading Commission.

"This issue is proceeding in New York federal court as we speak. Coinbase will continue to fight for the federal oversight of these markets that Congress intended," Grewal said.

A spokesperson for Gemini didn't immediately respond to a request for comment.