In a unanimous decision, the U.S. Supreme Court ruled against Coinbase on Thursday in the crypto exchange’s latest dispute before the nation’s top legal venue.
The 9-0 ruling, however, did not address any of Coinbase’s crypto-related practices—nor is it likely to impact the hot-button issue of American crypto regulation.
Instead, the decision addressed a single bureaucratic element of Coinbase’s ongoing legal battle against a class-action group of disgruntled customers who accused the exchange in 2021 of employing false and misleading tactics in the promotion of a Dogecoin sweepstakes.
“Some you win. Some you lose,” Coinbase’s Chief Legal Officer Paul Grewal wrote on Twitter in response to today’s ruling. “We are grateful for having had the opportunity to present our case to the Court and appreciate the Court's consideration of this matter.”
Previously, the crypto exchange sought to settle the case via arbitration, citing user agreements that every Coinbase customer consents to in order to use the platform.
A federal judge ruled
All nine Supreme Court justices agreed today that a lower court should decide which of the two agreements should take precedence here, as opposed to ruling outright that the case should be settled in arbitration, as Coinbase desired.
“Basic legal principles establish the answer,” Justice Ketanji Brown Jackson wrote today in the Court’s opinion. “[Coinbase’s] arguments are unpersuasive.”
The exchange had argued that if the Supreme Court ruled in favor of the lawsuit’s class-action plaintiffs, that ruling would unleash a torrent of legal disarray by encouraging other parties to wiggle out of arbitration agreements across the country.
“We do not believe that such chaos will follow,” Justice Jackson responded today.
America’s largest crypto exchange first went before the Supreme Court last year. In that case, the bulk of the Court’s conservative majority gave Coinbase a victory in a separate arbitration-related matter.
The ongoing class-action suit against Coinbase, filed by former Coinbase user David Suski, alleges that the exchange’s 2021 “Trade Doge, Win Doge” contest intentionally misled customers into believing that they needed to buy or sell $100 worth of Dogecoin in order to be eligible to win cash prizes.
The fine print of the contest revealed that you could also enter for free by mailing in an index card with your name, address, and birthday—given the United States’ stringent laws against sweepstakes that involve purchase requirements.
Suski and other plaintiffs argue they would have never spent $100 on DOGE had they known of the loophole.
While today’s decision will likely have little impact on crypto’s ongoing battle for regulatory legitimacy, it did notch one minor achievement: it marks the first time a U.S. Supreme Court Justice has ever had to write the word “Dogecoin” in an official Court opinion.
Edited by Ryan Ozawa.