A federal judge has denied Coinbase's motion to force a lawsuit over its Dogecoin sweepstakes into arbitration, allowing the case to proceed in court. The lawsuit alleges the crypto exchange misled users about requirements to enter its 2021 "Trade Doge, Win Doge" promotion.
Filed in 2021, the class action lawsuit accused Coinbase of obscuring the fact that users could enter the $1.2 million Dogecoin giveaway for free, without having to trade $100 of the meme cryptocurrency on its platform, reports Reuters. It is a separate legal action from the lawsuit against Elon Musk over alleged price manipulation.
The Coinbase suit, led by plaintiff David Suski, argues that Coinbase deliberately concealed a free mail-in entry option in order to drive trading volume and liquidity for its new Dogecoin listing.
“The official rules evince the parties' intent not to be governed by the user agreement's arbitration clause when addressing controversies concerning the sweepstakes,” wrote the Ninth Circuit in its decision to keep the claims in court, according to Law360, which affirmed that the U.S. Supreme Court will review the decision. This marks the second case over arbitration rules used by the crypto exchange to reach the high court in the past year.
Coinbase Finally Adds Dogecoin, Price Spikes
Popular US exchange Coinbase is adding Dogecoin to its Pro trading platform. According to a blog post today, users can begin transferring DOGE into their accounts, with trading set to begin on June 3, provided the exchange has enough liquidity in the token. The exchange will list five trading pairs for the token: against the dollar, euro, British pound, Tether, and Bitcoin. Dogecoin is the seventh-largest cryptocurrency with a market cap of $43.7 billion. The price of DOGE is up 5% in the last...
According to the lawsuit, Coinbase’s sweepstakes rules included a way to enter without payment by mailing in a 3x5 index card, as required by law. However, its promotional ad allegedly hid this option in faint, small print in order to push users towards paying the $100 entry fee.
“Coinbase knew that sweepstakes entrants who learned that they could enter the sweepstakes for free... would choose to enter for free, rather than purchase $100 worth of Dogecoin,” reads the complaint.
The lawsuit argues that Coinbase deliberately obscured the free entry method to drive trading volume for its new Dogecoin listing. The exchange had added support for the meme cryptocurrency just prior to launching the giveaway promotion.
“Coinbase was able to dramatically increase its Dogecoin trading volume and revenues by concealing the fact that consumers could enter the Sweepstakes for free,” the complaint states.
Dogecoin Fan Sues Coinbase Over 'False and Misleading' Sweepstakes
A disgruntled Dogecoin owner is leading a $5 million class-action lawsuit against Coinbase, claiming the crypto giant bamboozled he and others into paying to enter a sweepstakes to win the novelty cryptocurrency that they could have entered for free. In a complaint filed in San Francisco federal court, David Suski says he paid $100 to enter Coinbase's "Trade Doge, Win Doge" contest, which the company launched in June shortly after adding the cryptocurrency to its exchange. Suski says he wouldn't...
Suski claims he would not have paid $100 to enter had Coinbase properly disclosed the free method of entry, and alleges violations of California’s false advertising and unfair competition laws. The class action seeks over $5 million in damages on behalf of sweepstakes participants who paid the $100 entry fee.
Coinbase tried to push the lawsuit out of court and into private arbitration, citing arbitration agreements its users sign when opening accounts. However, a judge ruled that the sweepstakes terms specifying California courts as the forum superseded the account agreements.
“We are hopeful that the court, like every judge below, will hold Coinbase to the plain language of its own contracts with consumers," Suski's counsel, David J. Harris Jr. of Finkelstein & Krinsk LLP, told Law360.
The crypto exchange previously succeeded in forcing another user lawsuit into arbitration last year. However, it must now convince the high court to overturn the lower court’s decisions in the Dogecoin sweepstakes case.
Dogecoin Continues Surge Over 20% Following Coinbase Listing
Dogecoin is currently priced at $0.39, an approximate 20% increase following the meme coin’s debut on Coinbase yesterday. Users were told they could begin transferring DOGE into their Coinbase accounts—with actual DOGE trading set to begin tomorrow, June 3. Providing there is enough liquidity for users to trade DOGE, Coinbase will list five trading pairs for the cryptocurrency, against the dollar, euro, pound, Tether, and Bitcoin. Dogecoin’s price The price of Dogecoin has pushed higher thank...
The “Trade Doge, Win Doge” sweepstakes promised prizes up to $300,000 in Dogecoin following the token’s listing on Coinbase. However, many entrants felt misled when the free entry option later came to light.
In online crypto forums like Reddit, angry users accused Coinbase of concealing the free entry method in order to "artificially inflate demand and trading volume" for its new Dogecoin listing.
"This is so scammy. I'm actually shocked that a public company would do this,” wrote one Redditor in the r/Coinbase subreddit.
The controversy also highlighted ongoing critiques about Coinbase’s treatment of Dogecoin, with some critics arguing its listing of the meme token lacked substance beyond generating publicity and trading fees.
