Coinbase Loses Dogecoin-Related Supreme Court Case: Details

Coinbase Suffers Supreme Court Loss in Dogecoin Sweepstakes Arbitration Dispute

Cover image via U.Today

Coinbase, the prominent US cryptocurrency exchange, has faced a setback in the Supreme Court, losing its arbitration dispute stemming from a Dogecoin sweepstakes.

Users had accused the platform of false advertising, alleging that they were misled into paying $100 to enter the sweepstakes.

"What a week. Some you win. Some you lose. We are grateful for having had the opportunity to present our case to the Court and appreciate the Court's consideration of this matter," said Paul Grewal, Coinbase's chief legal officer, in a post on social media platform X.

Coinbase sought to enforce arbitration, a process typically favored by businesses to resolve disputes outside of court proceedings. While Coinbase users had agreed to arbitration for general disputes, the Dogecoin sweepstakes case presented a legal challenge due to a separate agreement that specified that disputes related to the contest would be heard in a California courtroom. This created a conflict between the user agreement's arbitration provision and the forum selection clause for the contest.

The Ninth Circuit Court of Appeals ruled against Coinbase, upholding a decision made by a California federal judge.

The Supreme Court agreed to hear the dispute in November after Coinbase appealed the lower court's ruling.

While the justices did not explicitly endorse the Ninth Circuit's reasoning, they unanimously ruled against Coinbase.

The Court rejected Coinbase's argument that not allowing it to enforce arbitration would result in chaos.