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Coinbase Settles Dogecoin Sweepstakes Lawsuit for $2.25 Million

Crypto exchange Coinbase, alongside marketing firm Marden-Kane, has reached a $2.25 million settlement to resolve claims related to a misleading Dogecoin sweepstakes.

This lawsuit stems from a class action filed by David Suski, who argued that he was misled about the promotion's entry conditions.

The settlement, pending approval by the U.S. District Court in Northern California, seeks to compensate U.S. users who participated in the Dogecoin sweepstakes held in June 2021.

The promotion promised a grand prize of $300,000 and smaller rewards but allegedly buried critical entry information in faint text on the website.

Suski stated he would not have traded Dogecoin on Coinbase had he known the contest was free, as he already owned the cryptocurrency through another platform.

In total, each affected user will receive a refund equivalent to the transaction fees incurred during their first $100 of Dogecoin trades related to the sweepstakes.

Coinbase reportedly earned around $1.3 million from these transaction fees during the promotion.

Both Coinbase and Marden-Kane have denied any wrongdoing, claiming that reasonable customers could discern that no purchase was necessary to enter.

The U.S. Supreme Court had previously declined to force arbitration in this case, leaving it to the District Court to evaluate the settlement agreement.

As of now, Dogecoin trades at approximately $0.23, reflecting a recent fluctuation in price amid broader market conditions.