- Coinbase has agreed to a $2.25 million settlement to resolve a class-action lawsuit over a 2021 Dogecoin sweepstakes
- The lawsuit has alleged that Coinbase misled users into believing a Dogecoin purchase was necessary to enter the sweepstakes
- The settlement, pending court approval, will reimburse eligible U.S. users for transaction fees and spreads incurred during the promotion
Coinbase and marketing partner Marden-Kane have reached a $2.25 million settlement to resolve claims stemming from a 2021 Dogecoin giveaway campaign. Plaintiffs claimed the promotion led users to believe a Dogecoin purchase was required for entry, despite a free alternative being available. The settlement, if approved by the court, will compensate affected users for associated trading costs.
Dogecoin Sweepstake Bites Buyers
In mid-2021, Coinbase launched a promotional sweepstakes offering $1.2 million in Dogecoin prizes to celebrate the coin’s listing on the platform. Users were informed they could enter by buying at least $100 worth of Dogecoin, or via a free mail-in entry option, but the availability of the free method was not made clear, prompting many users to spend money unnecessarily.
A class-action lawsuit soon followed, with Coinbase and Marden-Kane accused of deceptive advertising after lead plaintiff David Suski claimed he wouldn’t have made the trade had he been properly informed about the no-purchase option. Suski initially sought $5 million in damages for himself and the other plaintiffs.
Eligible Users to Get Refunds
After Coinbase attempted to send the case to arbitration, the matter escalated to the U.S. Supreme Court, which ruled that a judge—not an arbitrator—should determine whether a later contract overrides an earlier agreement regarding arbitration. That ruling cleared the way for formal negotiations, resulting in the $2.25 million settlement, announced this week.
Eligible users—those who made qualifying Dogecoin trades—will be reimbursed for the transaction fees and spreads related to their entries. The deal also includes proposed service awards of up to $7,000 for named plaintiffs and up to $750,000 in attorney fees.
A Coinbase spokesperson commented, “We are pleased to have reached an agreement to resolve the case, subject to the Court’s approval.” Both Coinbase and Marden-Kane have denied any legal wrongdoing, stating that the sweepstakes terms were clearly explained.
