The U.S. Supreme Court is set to address a pivotal case involving Coinbase’s ability to compel users into arbitration, rather than court, amidst accusations of false advertising related to a dogecoin sweepstakes.
Post Text (Maximum 200 words): The U.S. Supreme Court has taken a significant step by agreeing to hear the case concerning Coinbase’s authority to oblige users to resolve disputes via private arbitration instead of a traditional court setting.
This legal battle stems from an incident involving Coinbase’s 2021 sweepstakes, which promised participants a chance to win substantial prizes in meme cryptocurrency dogecoin (DOGE), with amounts reaching up to $1,200,000. Some users claimed that they were lured into paying for sweepstakes entry, despite the presence of a free participation option.
Accusing Coinbase of violating California law through false advertising, affected users initiated a class-action lawsuit against the cryptocurrency exchange.
The crux of the matter lies in the location for dispute resolution. The users are adamant about having their grievances addressed in a California court, while Coinbase argues that when users signed up for their accounts, they committed to settling any disputes through arbitration.
A California federal judge initially denied Coinbase’s request for arbitration, emphasizing that a separate forum selection clause in the sweepstakes’ official rules overrode the User Agreement’s arbitration clause.
Coinbase has appealed this decision, but the Ninth U.S. Circuit Court of Appeals in San Francisco upheld the denial. Now, it falls upon the Supreme Court to determine whether Coinbase can compel users into arbitration.