Coinbase loses Supreme Court case over Dogecoin dispute, stock drops

Crypto exchange Coinbase lost its Supreme Court case regarding the 2021 Dogecoin giveaways.

Coinbase, Inc. v. In the Suski lawsuit, Coinbase consumers alleged they were deceived into paying $100 or more to enter a sweepstakes in June 2021 for a chance to win prizes of up to $1.2 million in Dogecoin (DOGE).

On Thursday, the Supreme Court unanimously ruled against Coinbase, stating that the court, not the arbitrator, should decide where the dispute belongs.

Coinbase case details

The base of the case involves David Suski and others who participated in Coinbase sweepstakes in 2021. They sued the exchange and the sweepstakes management company for misleading app users, saying they were tricked into paying $100 into Dogecoin.

Coinbase fought to use a clause in its user agreement, hoping to resort to arbitration, but the district court, later upheld by the Ninth Circuit, interpreted the contract documents to include the sweepstakes agreement, according to Axios.

Coinbase decision

Judge Ketanji Brown Jackson stated that the court, not the arbitrator, should determine the appropriate jurisdiction for the dispute. In cases involving two conflicting contracts, Jackson emphasized that “the court must decide what the parties agreed to.”

Coinbase Chief Legal Officer Paul Grewal responded to the decision on X: “What a week it has been. Some you win. Some you lose. “We are grateful for the opportunity to present our case to the Court and appreciate the Court’s consideration of this matter.”

The decision has little to do with crypto because the decision did not touch on any significant digital asset but focused more on arbitration.

Coinbase lost 9-0 at SCOTUS. Fortunately for the crypto industry, it’s not all about crypto

It’s about that stupid Dogecoin giveaway contest.

Normally Coinbase can force people to arbitrate, but not this timehttps://t.co/agOxRVzNXV pic.twitter.com/gu7fLZDd5H

— Jeff Roberts (@jeffjohnroberts) May 23, 2024

Following the news, Coinbase’s stock (COIN) price fell more than 3.5% in mid-morning trading and is currently trading down 2.5%.