The central theses
- Coinbase is facing a class action lawsuit from a Dogecoin trader seeking $ 5 million in damages.
- Plaintiff, David Suski, alleged that he was deceived by Coinbase into trading $ 100 worth of Dogecoin to be eligible for a $ 1.2 million promotion.
- The rules of the promotion state that a customer can be eligible without making a trade by sending a simple index card.
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A Coinbase user has filed a class action lawsuit for $ 5 million in damages claiming the exchange ran a misleading promotion related to Dogecoin.
Disgruntled trader files class action lawsuit
Coinbase, the largest retail cryptocurrency exchange in the United States, is facing a class action lawsuit from a Dogecoin trader.
In a legal document, plaintiff David Suski said he was duped into trading $ 100 worth of Dogecoin (DOGE) in order to qualify to enter Coinbase’s $ 1.2 million sweepstakes offer.
The document claims that taking part in sweepstakes could be free, but Coinbase did not disclose that fact for financial reasons.
Sweepstakes is a competition in which prizes are awarded to users of one of Coinbase’s products or services via a lottery system. The sweepstakes that the plaintiff had trouble with took place on June 3 and included prizes worth $ 1.2 million in Dogecoin.
The competition was aimed at stimulating Dogecoin trading in the days following the Coinbase Pro listing.
From that day on, Coinbase began promoting Dogecoin sweepstakes worth $ 1.2 million through an advertising campaign targeted to its users via email and through its website and mobile app.
In the promotions, Coinbase urged users to trade at least $ 100 or more in Dogecoin between June 3 and June 10, 2021 in order to qualify for the sweepstakes.
The plaintiff’s lawyer claims the campaign was misleading because the rules allow anyone to participate for free. The rule was not announced in advance and instead was only mentioned in a separate section “Rules and details”.
The current rules for the competition stipulate that a customer can be eligible for the competition by sending a 3 × 5 inch index card with his name, address, e-mail address, telephone and date of birth.
However, the document further argued that Coinbase’s ads were knowingly designed to “deceive and confuse” the plaintiff and others into believing that they would need to trade at least $ 100 worth of Dogecoin on Coinbase to participate. The document read:
“The only reason the plaintiff pledged to buy more Dogecoins from Coinbase was because the company made him believe it was necessary to enter Coinbase’s $ 1.2 million sweepstakes.”
Finally, the document states that the defendant would not have paid Coinbase $ 100 including trading commissions for the purchase of Dogecoin had the 100% free entry option been made clearer.
It added that a “fraudulent digital advertising campaign” unnecessarily cost merchants millions of dollars in Dogecoin purchases and commissions. The lawsuit seeks punitive damages in excess of $ 5,000,000 on behalf of the plaintiff and millions of other users.
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