Coinbase Fails to Dismiss Dogecoin Class Action Suit
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The lawsuit against Coinbase, filed in 2021, accuses the exchange of concealing the fact that users could participate in a $1.2 million Dogecoin giveaway without having to trade $100 of the meme cryptocurrency on its platform. This legal action is separate from the lawsuit against Elon Musk, which alleges price manipulation.
Coinbase Faces $5 Million Lawsuit Over Alleged Deceptive Sweepstakes Practices
The plaintiff, David Suski, who brought a $5 million lawsuit against Coinbase, alleges that he was deceived into trading $100 of Dogecoin for a chance to enter the sweepstakes. He argues that he would not have made the transaction if Coinbase had transparently disclosed the option for free entry. Suski claims that Coinbase violated state and federal laws, including deceptive trade practices and false advertising.
The revelation of the free entry option left many users feeling misled, and they expressed their discontent on forums, accusing Coinbase of trying to hide information to artificially boost demand and trading volume. This controversy has also reignited criticism of Coinbase's handling of Dogecoin, with some suggesting that the exchange's listing of the meme token primarily served to generate publicity and trading fees.
Coinbase's Arbitration Battle Heads to Supreme Court, Raises Questions on Contract Clauses
Coinbase made significant efforts to compel the lawsuit into private arbitration, but a judge ruled that the sweepstakes terms, specifying California courts as the venue, took precedence over the account agreements. The Supreme Court's decision to hear this case may have broader implications for arbitration clauses in contracts and raise questions about their enforceability. It could set a precedent for how similar disputes are resolved in the future.