United States courts to control Coinbase Dogecoin winnings dispute

The United States Supreme Court has overturned Coinbase's user agreement, allowing district courts to rule on winnings related to Dogecoin rewards.

Crypto exchange Coinbase launched a Dogecoin (DOGE) winnings promotion event in June 2021, but the user agreement had conflicting clauses to resolve disputes.

Coinbase selects arbitrators to resolve financial disputes, users support court intervention. Both options are listed separately in the platform agreements.

On May 23, the US Supreme Court ruled that state and federal courts have exclusive jurisdiction over disputes involving Coinbase's sweepstakes promotion.

“We conclude that it is the court, not the judge, who should decide whether the parties' first agreement is superseded by the second.” The judgment of the Ninth Circuit is affirmed.

Judge Neil Gorsuch, who was appointed by President Donald Trump in 2017, highlighted that the arbitration was a contract issue. He added:

“Parties (crypto exchanges and users) may contractually agree that an arbitrator will resolve arbitration claims and underlying disputes instead of a court.”

The Supreme Court ultimately dismissed Coinbase's earlier claims that the court's approach could “invite violence” by facilitating challenges to proxy clauses. “We do not believe that such chaos will occur,” the verdict added.

When contracts contain only an arbitration clause, courts in the US are not allowed to intervene in disputes.

However, when consumers agree to two contracts — one that refers a dispute to arbitration, and another that expressly or implicitly refers a dispute to court — a court must decide which contract governs.

Related: Coinbase Reopens XRP Trading in New York

Coinbase recently experienced a major outage that affected its trading services mobile and desktop applications.

The official X account of Coinbase support posted on May 14th about the outage. He said he is investigating the issue and working on a solution. The account has repeatedly claimed that users' funds are safe.

Cointelegraph visited the website, which displayed a “503 Service Temporarily Unavailable” error message. According to the developer guide found on Mozilla, the most common cause is that the servers are down for maintenance or overloaded.

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