Coinbase is being sued…..
According to reports, the lawsuit alleges that Coinbase took part in deceptive practices relating to a Dogecoin promotion it ran on its platform.
The plaintiff David Suski claims that he was tricked into trading $100 worth of Dogecoin to be eligible for a $1.2 million prize.
It is unclear at this time whether or not the allegations against Coinbase are weighty enough to cost them a hefty settlement amount, but brokerage and crypto promotions are typically plagued by many red flags.
Common scams include giving a trader more margin or free cryptocurrency for signing up, only to learn that gains are conditional, and holdings can go back to the brokerage at any time for an array of reasons.
Most veteran traders know to stay away from these promotions, but a new user signed up to a custodial wallet like Coinbase would likely have no idea.
Here’s the latest on the lawsuit:
— Guy (@DadOfAHero) July 18, 2021
Crypto Briefing had more on the story:
Coinbase, the largest retail cryptocurrency exchange in the U.S., is facing a class action lawsuit from a Dogecoin trader.
In a legal document, plaintiff David Suski said he was deceived into trading $100 of Dogecoin (DOGE) to become eligible for entry into Coinbase’s $1.2 million Sweepstakes offer.
The document claims that entry into Sweepstakes could be made free of charge, but Coinbase did not disclose that fact for financial gains.
Sweepstakes is a contest where prizes are given out through a lottery system to users of one of Coinbase’s product or services. The Sweepstakes that the plaintiff had issues with took place on Jun. 3 and involved prizes worth $1.2 million in Dogecoin.
Coinbase Sued Over "Deceptive" Dogecoin Campaign
Key Takeaways Coinbase faces a class action lawsuit from a Dogecoin trader who seeks $5 million in damages. The plaintiff, David…
— Briefly Crypto (@BrieflyCrypto) July 19, 2021
Decrypt had some more details:
According to Suski, who appears to be a Bank of America consultant based on this LinkedIn profile, he already owned more than 1,000 Dogecoins he had purchased on Robinhood, and would not have bought Doge on Coinbase had he known about the free entry option. Suski did not immediately respond to a request for comment at his LinkedIn address.
Coinbase declined to comment on the lawsuit.
The sweepstake rules said the winners would be selected on June 17, and that Coinbase would contact winners directly. In the last week, the Doge sweepstakes controversy has been the source of a lively discussion on Reddit.
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