US Judges To Decide On Coinbase Dogecoin Issues

However, the U.S. Supreme Court has overruled Coinbase’s user agreement, granting district courts the authority to settle sweepstakes disputes involving Dogecoin rewards.

In June 2021, Coinbase launched a Dogecoin sweepstakes promotional event, but the user agreement contained conflicting clauses about dispute resolution.

Coinbase preferred to resolve financial disputes through arbitration, while users favored court intervention. Both options were outlined separately in the platform’s agreements.

On May 23, the U.S. Supreme Court decided that state and federal courts would have exclusive jurisdiction over Coinbase’s sweepstakes promotion controversies.

“We conclude that a court, not an arbitrator, must decide whether the parties’ first agreement was superseded by their second. The Ninth Circuit’s judgment is affirmed,” the ruling stated.

Justice Neil Gorsuch, nominated by President Donald Trump in 2017, emphasized that arbitration is a matter of contract, noting, “Parties (crypto exchanges and users) can agree by contract that an arbitrator, rather than a court, will resolve threshold arbitrability questions as well as underlying merits disputes.”

Dogecoin Sparks Legal Debate

The Supreme Court also dismissed Coinbase’s previous claims that the court’s approach could “invite chaos” by encouraging challenges to delegation clauses, asserting, “We do not believe that such chaos will follow.”

U.S. courts cannot intervene in disputes if the contracts contain only an arbitration clause.

However, if users agree to two contracts—one assigning arbitrability disputes to arbitration and the other explicitly or implicitly assigning these disputes to the courts—the court must determine which contract prevails.

Coinbase notice on system-wide outage and degraded transactions. Source: Mozilla

A major outage recently disrupted Coinbase’s trading services on its mobile and desktop applications.

On May 14, Coinbase Support’s official X account announced the outage. They reported investigating the issue and working on a solution, reassuring users that their funds were safe.

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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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