On November 3, the United States Supreme Court granted Coinbase’s request to hear a lawsuit concerning the company’s arbitration clause with its customers. Coinbase had tried to move a dispute stemming from a 2021 sweepstakes out of court and into private arbitration, but a lower court ruled that the exchange had raised its right to do so.
The allegations against Coinbase Exchange accusing them of false and fake advertising in the sweepstakes and the Supreme Court’s decision could have broader implications for arbitration clauses in contracts.
Detail of the Lawsuit!
The Coinbase lawsuit, which was filed in 2021, accused Coinbase of hiding the fact that users could enter the $1.2 million Dogecoin giveaway for free without having to trade $100 of the meme cryptocurrency on its platform, reports Reuters. It is a separate legal action from the lawsuit against Elon Musk over alleged price manipulation.
Plaintiff David Suski, the person who filed a $5 million lawsuit against Coinbase, claimed he was cheated into trading $100 of Dogecoin for an entry into a $1.2 million sweepstakes offer on Coinbase.
The lawsuit says that free entry was likely into the sweepstakes, but Coinbase did not reveal this fact for its financial growth. Suski argues that he wouldn’t have disbursed if Coinbase had clearly disclosed there was another way to enter the sweepstakes. He claims that Coinbase disregarded state and federal laws, including deceptive trade practices and fake advertising.
Debate Over Misleading Entrants!
Many users felt misled when the free entry option was revealed, with angry users on forums blaming Coinbase for trying to hide the information to artificially inflate demand and trading volume. The debate has also revived critiques of Coinbase’s treatment of Dogecoin, with some arguing its listing of the meme token lacked importance beyond generating publicity and trading fees.
Coinbase had tried its level best to force the lawsuit into private arbitration, but a judge ruled that the sweepstakes terms specifying California courts as the forum superseded the account agreements.
Source: coinpedia.org