The Supreme Court of the United States has issued a ruling against cryptocurrency exchange Coinbase in a legal dispute over the Dogecoin (DOGE) sweepstakes. According to recently obtained legal documents from Cornell Law, the Supreme Court has unanimously decided that the conflict between Coinbase’s sweepstakes contract and user agreement must be resolved through the court system.
Justice Ketanji Brown Jackson stated, “Arbitration is a matter of contract and consent, and we have consistently held that disputes are subject to arbitration only if the parties have actually agreed to it. Therefore, before the delegation provision or the forum selection clause can be enforced, a court must determine what the parties have agreed to.”
The controversy arises from Coinbase’s 2021 Dogecoin sweepstakes, which appears to have conflicting rules compared to the crypto exchange’s user agreement. According to the court document, Coinbase’s user agreement, which users must agree to when creating an account, states that disputes should be settled through arbitration. However, the rules for the DOGE sweepstakes stipulate that all disputes must be resolved through California’s court system.
A class action lawsuit was eventually filed against Coinbase, alleging that the sweepstakes violated the law. The crypto exchange attempted to resolve the dispute through arbitration, as stated in its user agreement. However, the motion was denied by a District Court, and the Ninth Circuit, an appellate court, agreed with the decision.
While the Supreme Court did not comment on the correctness of the Ninth Circuit’s reasoning, it did rule that a court must ultimately determine what was agreed upon. “Focusing on the conflict between the delegation clause in the first contract and the forum selection clause in the second, the question becomes whether the parties agreed to submit the dispute to arbitration. This question must be answered by a court.”
Stay up to date with the latest news and insights by subscribing to receive email alerts. Check out our website for price action updates and follow us on X, Facebook, and Telegram. Get your daily dose of news and analysis with The Daily Hodl Mix. (Image: Midjourney)
Disclaimer: The opinions expressed in The Daily Hodl are not investment advice. Investors should conduct their own research before making high-risk investments in Bitcoin, cryptocurrency, or digital assets. Please be aware that your transfers and trades are at your own risk, and you are responsible for any losses you may incur. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, and it is not an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
