The United States Supreme Court has intervened in Coinbase’s user agreement, granting district courts the authority to resolve disputes related to Dogecoin sweepstakes rewards.
In June 2021, crypto exchange Coinbase launched a promotional event for Dogecoin sweepstakes. However, the user agreement contained conflicting clauses regarding how disputes should be resolved.
Coinbase preferred to use arbitrators for financial disputes, while users preferred to have the option of seeking court intervention. Both options were outlined separately in the platform’s agreements.
On May 23, the U.S. Supreme Court made a ruling that state and federal courts will now have exclusive jurisdiction over controversies arising from Coinbase’s sweepstakes promotion.
Additionally, Justice Neil Gorsuch, who was nominated by former President Donald Trump in 2017, emphasized that arbitration is a contractual matter. He stated:
“The Supreme Court has finally rejected Coinbase’s previous claims that the court’s approach could lead to chaos by allowing challenges to delegation clauses. We do not believe that such chaos will ensue,” the ruling further stated.
Under normal circumstances, U.S. courts do not have the authority to intervene in disputes if contracts include an arbitration clause only.
However, when users agree to two contracts – one that sends arbitrability disputes to arbitration and another that either explicitly or implicitly sends arbitrability disputes to the courts – a court must determine which contract governs the dispute.
In related news, Coinbase recently experienced a significant outage that affected its trading services on both mobile and desktop applications.
An official account from Coinbase Support, known as the X account, acknowledged the outage on May 14 and assured users that their funds were secure. The account stated that they were investigating the issue and working on a solution.
Upon visiting the website, Cointelegraph found a “503 Service Temporarily Unavailable” error message, which is commonly caused by server maintenance or overload, according to a developer guide from Mozilla.
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