Coinbase Bears The Brunt Of Supreme Court’s Dogecoin Verdict, DOGE Suffers 4% Slump
May 24 2024 - 1:00AM
NEWSBTC
In a recent ruling that could have implications for the crypto
industry, the US Supreme Court unanimously sided against US-based
cryptocurrency exchange Coinbase, over a 2021 Dogecoin (DOGE)
sweepstakes dispute. The court’s decision, delivered by
Justice Ketanji Brown Jackson, dismissed Coinbase’s argument that a
ruling against it would invite legal turmoil, emphasizing the
importance of contractual agreements and the role of courts in
resolving disputes. Coinbase Arguments Dismissed The key issue was
whether the dispute should be submitted to arbitration or litigated
in court. According to Bloomberg Law, the court emphasized that
arbitration requires the consent of the parties and that in cases
involving conflicting contracts, the court must determine the
parties’ intent. Coinbase had contended that a ruling against it
would “create chaos” by encouraging parties to challenge
arbitration agreements. However, the court rejected this concern,
stating that it did not foresee such chaos arising from its
decision. Related Reading: Is $77,600 The Next Step For Bitcoin?
On-Chain Pricing Model Hints So The case revolved around a
sweepstakes in which consumers alleged they were deceived into
paying $100 to participate. The conflict emerged due to the
presence of two contracts that pointed to different dispute
resolution mechanisms. David Suski and others who
participated sued the exchange and the company that ran the
Dogecoin sweepstakes. They alleged violations of California’s false
advertising law, unfair competition law, and the Consumer Legal
Remedies Act. While a general user agreement mandated arbitration
for all disputes, a sweepstakes-specific contract stipulated that
disputes must be brought before a California court. Varying
Outcomes In Future Cases? Justice Jackson highlighted the
need for a court to determine which contract should govern the
resolution of the dispute in such situations. However, the
court refrained from addressing whether the Ninth Circuit Court of
Appeals correctly determined that the sweepstakes-specific contract
“superseded” the general user agreement, deeming it beyond the
scope of the question presented. Justice Neil Gorsuch provided a
concurring opinion, emphasizing the contractual nature of
arbitration and suggesting that different facts could yield a
different outcome. He noted that the enforceability of arbitration
depended on the parties’ agreement. Related Reading: Déjà Vu?
Bitcoin Price Eyes Repeat Performance, Could Hit $140,000 By August
– Analyst Coinbase’s Chief Legal Officer, Paul Grewal, reflected on
the ruling, acknowledging both victories and defeats. Grewal
expressed gratitude for the opportunity to present their case to
the court and appreciated their consideration of the matter.
Double-Digit Drop For COIN, DOGE Follows Suit Following the
verdict, Coinbase stock, which trades under the ticker COIN, took a
significant hit, plunging over 11% to a valuation of $220. This
decline came as a surprise given the initial expectations of a
potential victory. Prior to the ruling, Coinbase’s stock had
reached a high of $240 on Wednesday. At the same time, the
dog-themed meme cryptocurrency DOGE has also experienced a
retracement of more than 4% over the past 24 hours, resulting in a
current trading price of $0.158. Featured image from
Shutterstock, chart from TradingView.com
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