Coinbase, Marden-Kane Settle Dogecoin Sweepstakes Lawsuit for $2.25M, Clarifying Future Promotions
Coinbase and its marketing partner Marden-Kane have agreed to a $2.25 million settlement to resolve a class-action lawsuit linked to their June 2021 Dogecoin sweepstakes event. The lawsuit claimed that Coinbase’s promotion misled users by not clearly stating that no purchase was required for sweepstakes entry, leading many to believe they needed to buy or sell Dogecoin (DOGE) to participate. As part of the settlement, eligible U.S. users who traded at least $100 in Dogecoin during the sweepstakes will receive compensation equaling their first transaction fee and spread. The lawsuit was initiated by a customer unaware of the no-purchase option, with Coinbase reportedly earning $1.3 million in transaction fees during the event. The U.S. Supreme Court previously rejected Coinbase’s attempt to move the dispute to arbitration. The resolution includes updated promotional disclosures but no admission of wrongdoing, addressing legal and reputational risks for Coinbase and clarifying future compliance. For crypto traders, this outcome removes regulatory uncertainty for DOGE trading on Coinbase and strengthens user trust.
Neutral
The settlement resolves a lingering legal risk for Coinbase and removes uncertainty around its promotional practices, particularly regarding Dogecoin (DOGE) trading. While this legal resolution removes potential regulatory and reputational headwinds, it does not directly impact the supply, demand, or core fundamentals of DOGE. There is no indication of major financial penalties or market-altering consequences. As a result, the immediate and short-term price impact on Dogecoin is expected to be neutral. Long-term, the improved clarity in promotional practices and enhanced user trust may benefit platform sentiment but is unlikely to drive significant price movement for DOGE itself.