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Coinbase facing a lawsuit due to ‘deceptive ad campaign’




Coinbase exchange was recently sued by one of its users, who accused it of running a misleading Dogecoin campaign that resulted in the user suffering major losses. The plaintiffs are demanding that the largest US exchange pay $5 million in damages.

What happened?

The user who is suing Coinbase is named David Suski. The Plaintiff claims that he was deceived by Coinbase and encouraged to trade $100 worth of Dogecoin for an entry into a $1.2 million sweepstakes offer that the exchange has made. According to the document, a trader could enter the sweepstakes even if they did not buy $100 worth of DOGE, but the exchange failed to point that out.

Coinbase started supporting Dogecoin only about a month and a half ago, starting on June 3rd, 2021. The exchange was likely inspired to make the move due to the massive amounts of popularity and demand that DOGE has seen over the last six months. So, while the exchange was a bit late to the party, given that crypto prices were cut in half for several weeks by the time it actually onboarded DOGE, it also brought a new event with the coin, likely hoping to attract people to it once more.

As soon as DOGE was listed, the exchange sent an email to its clients, notifying them about the sweepstakes. It noted that users can now win DOGE by trading DOGE, offering detailed instructions on how users can enter the event through trading.

It also mentioned that a person can go to a separate page called rules and details, where there is a different set of instructions. Specifically, according to these instructions, one could enter by sending a 3×5-inch index card to the exchange. This index card would have to contain certain specific information, including the name and address of the customer, their phone and email, as well as their date of birth.

In other words, it is possible to enter the sweepstakes without having to engage in trading, as the email itself pointed out, which is what the plaintiff points out in the document. Their issue with the exchange is that it hid the free-of-charge way of entering the sweepstakes, while in the direct communication with the users, it made it seem like trading was the only way to do it.

The plaintiff accuses the exchange of false advertising

According to the plaintiff, this should be considered a false advertisement, and the sweepstakes promotion was designed to deceive and confuse the exchange’s customers. The way of entering that Coinbase preferred included users trading $100 worth of DOGE, and the plaintiff claims that, if ads were clear about the existence of the free entry option, he would not have paid the commission for the trade to acquire Dogecoin, nor would he have given Coinbase $100.

The user is not skeptical of Dogecoin — on the contrary. They already owned 1,000 DOGE coins, although these funds were stored in a separate account with another company. So, the end result is a lawsuit that now seeks to make Coinbase pay $5 million in damages on behalf of not only the plaintiff himself but also millions of other Coinbase customers who were likely equally unaware of the free way to enter the sweepstakes, according to the document.

The community disagrees

Naturally, there are several ways of looking at the issue. From the plaintiff’s perspective, Coinbase purposefully hid the secondary option to enter the sweepstakes. However, many in the crypto community pointed out that they took very little time to find this free entry option simply by reading what the email actually said, and following the instructions to familiarize themselves with the rules on the mentioned rules page.

Coinbase’s fans on Reddit, for example, have simply called the plaintiff “lazy,” pointing out that all the necessary details about different ways to enter were clearly presented. Of course, they admit that Coinbase deserves to be criticized for a number of its practices, but the community insists that this particular case is not one of them.

Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN,, Bitcoinist, and NewsBTC.