Coinbase loses Supreme Court case over Dogecoin dispute, stock drops

Crypto exchange Coinbase has lost a Supreme Court case over its 2021 Dogecoin sweepstakes. 

In Coinbase, Inc. v. Suski, Coinbase consumers claimed 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 ruled unanimously against Coinbase, stating that a court, not an arbitrator, should decide where the dispute belongs.

Coinbase case details

The basics of the court case involve David Suski and others who entered a Coinbase sweepstakes in 2021. They sued the exchange and the sweepstakes management company for misleading app users, saying they were duped into paying $100 in Dogecoin to enter.

Coinbase fought to use a clause in their user agreement, hoping to compel arbitration, but the district court — later confirmed by the Ninth Circuit — interpreted the contractual documents to include the sweepstakes agreement, per Axios. 

Coinbase ruling

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

Paul Grewal, Chief Legal Officer at Coinbase, responded to the ruling on X, stating, “What a week. Some you win. Some you lose. We are grateful for having had the opportunity to present our case to the Court and appreciate the Court’s consideration of this matter.”

The ruling has little to do with crypto, as it didn’t address any significant digital assets but focused more on arbitration. 

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