Supreme Court Overrules Coinbase’s Agreement

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The United States Supreme Court has nullified Coinbase’s user agreement, thus allowing district courts to handle disputes regarding its Dogecoin sweepstakes promotion. The promotion, launched in June 2021, faced controversy due to conflicting clauses in the user agreement over dispute resolution. While Coinbase favored arbitration, users preferred court intervention, and both methods were mentioned separately in the platform’s agreements.
What is Happening on the Coinbase Front?
On May 23, the Supreme Court ruled that state and federal courts possess exclusive jurisdiction over disputes related to Coinbase’s sweepstakes, stating that the court, not an arbitrator, should determine the validity of the initial user agreement. This decision affirms the Ninth Circuit’s previous ruling.
Judge Neil Gorsuch, appointed by President Donald Trump in 2017, highlighted that arbitration is a contractual matter, noting that parties can agree via contract for an arbitrator to resolve critical arbitrability questions as well as the underlying disputes.
The Supreme Court dismissed Coinbase’s concerns that the court’s approach would cause chaos by challenging delegation provisions, asserting that such chaos is unlikely. In the US, courts cannot intervene in disputes if contracts include only an arbitration clause.
Details Draw Attention
However, if users agree on two different contracts, the court must decide which one is valid. Recently, Coinbase experienced a significant outage affecting its trading services on both mobile and desktop platforms.
Coinbase Support’s official X account addressed the outage on May 14, indicating that they were investigating and working on a solution. The account emphasized that users’ funds remained safe. During this period, many users encountered a 503 Service Temporarily Unavailable error message on the website, often caused by server maintenance or overload, according to Mozilla’s developer guide.
User Takeaways

Disputes regarding Coinbase’s sweepstakes will be handled by state and federal courts, not through arbitration.
The court ruling emphasizes the importance of clear user agreements to avoid conflicting clauses.
Regular communication and transparency from support teams are crucial during service outages to maintain user trust.

In conclusion, the Supreme Court’s decision underscores the necessity for well-defined user agreements and the pivotal role of the judiciary in resolving disputes, ensuring clarity and fairness in contractual matters.
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