A Federal Judge Denies Coinbase’s Motion to Force Lawsuit into Arbitration
A federal judge has rejected Coinbase’s attempt to move a lawsuit regarding its Dogecoin sweepstakes into arbitration. The lawsuit claims that the crypto exchange misled users about the requirements to enter its “Trade Doge, Win Doge” promotion in 2021. The class action lawsuit alleges that Coinbase concealed the fact that users could enter the $1.2 million Dogecoin giveaway for free, without having to trade $100 worth of the cryptocurrency on its platform.
The Allegations Against Coinbase
According to the lawsuit, Coinbase intentionally hid the option for users to enter the sweepstakes without payment by mailing in a 3×5 index card. The promotional ad allegedly downplayed this option in order to encourage users to pay the $100 entry fee. The lawsuit argues that Coinbase did this to boost trading volume and liquidity for its newly listed Dogecoin.
Coinbase’s Attempted Defense and Court Decision
Coinbase tried to argue that the lawsuit should be resolved through private arbitration, citing arbitration agreements signed by its users. However, the judge ruled that the terms of the sweepstakes specified California courts as the appropriate forum for resolving disputes, superseding the account agreements. This decision marks the second time in a year that arbitration rules used by Coinbase have reached the U.S. Supreme Court.
The Implications and Criticisms
The “Trade Doge, Win Doge” promotion promised prizes of up to $300,000 in Dogecoin following the token’s listing on Coinbase. However, many participants felt deceived when they learned about the hidden free entry method. Some accused Coinbase of artificially inflating demand and trading volume for Dogecoin. Critics also raised concerns about Coinbase’s treatment of Dogecoin, suggesting that its listing of the meme token was primarily a publicity and fee-generating move.
Hot Take: Coinbase Faces Legal Battle Over Alleged Misleading Sweepstakes
Coinbase’s motion to move the lawsuit concerning its Dogecoin sweepstakes into arbitration has been denied by a federal judge. The lawsuit accuses the crypto exchange of misleading users about the requirements to enter its promotion. It alleges that Coinbase concealed the option for users to enter the giveaway for free, pushing them towards paying a $100 entry fee. This legal battle raises questions about transparency and fair practices in the cryptocurrency industry. It also highlights ongoing criticisms of Coinbase’s handling of Dogecoin, with some questioning the motives behind its listing of the meme token.
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