Coinbase Inc. has agreed to a $2.25 million settlement with promoter Marden-Kane to resolve a proposed class action related to a Dogecoin cryptocurrency sweepstakes. The settlement, filed in the U.S. District Court for the Northern District of California, follows a recent U.S. Supreme Court ruling.
The settlement, which is subject to court approval, affects participants of a $1.2 million Dogecoin sweepstakes. It applies to individuals in the U.S. who opted into the promotion and traded Dogecoin on the Coinbase platform for at least $100. Under the agreement, hundreds of thousands of participants could be reimbursed for transaction fees and spreads incurred during their initial $100 in Dogecoin trades.
“While plaintiffs believe their claims were strong and could have led to a more favorable outcome, the settlement offers a practical resolution amidst the risks involved in continuing litigation,” said the plaintiffs’ motion for preliminary approval.
Class representatives David Suski, Jaimee Martin, Jonas Calsbeek, and Thomas Maher may receive service awards of up to $7,000 each. Their attorneys at Harris LLP will also request up to $750,000 in legal fees.
The lawsuit stems from allegations that Coinbase and Marden-Kane misled millions of consumers, claiming they needed to purchase Dogecoin to enter the sweepstakes. Plaintiffs contend that the promotion could have been entered for free, but misleading communications made it appear that purchasing Dogecoin was required.
The case was impacted by a Supreme Court ruling last year, which clarified that judges, not arbitrators, should decide if contractual terms overrode prior agreements regarding arbitration. This led to mediation sessions between the parties, ultimately resulting in the settlement.
“We are pleased to have reached an agreement to resolve the case, subject to the court’s approval,” said a Coinbase spokesperson.
Marden-Kane and plaintiff counsel did not immediately respond to requests for comment.
