Judge approves $2.25 million Coinbase settlement over Dogecoin sweepstakes

SAN FRANCISCO (CN) — A federal judge granted final approval Monday to a class action settlement against cryptocurrency exchange Coinbase for $2.25 million over complaints about a Dogecoin sweepstakes.

“I am willing to sign off on this particular settlement agreement. Congratulations to everybody,” U.S. Magistrate Judge Sallie Kim said.

In 2021, Coinbase announced a sweepstakes campaign to promote Dogecoin’s debut on the platform. To enter, users had to buy or sell Dogecoins for $100 or more between June 3 and June 10, 2021. However, users could also enter the contest by mailing a handwritten card to the promoter.

Several Coinbase users who participated in the sweepstakes sued the company, claiming it had violated state laws by not adequately advertising the mail-in contest option.

Coinbase attempted to force arbitration, citing its user agreement. A lower court rejected Coinbase’s motion, and the Ninth Circuit affirmed. On appeal to the Supreme Court, the justices were unanimous in concluding that a court, not an arbitrator, should decide the issue.

The parties reached an agreement in principle in December 2024, and Kim granted preliminary approval in July.

Representatives for the parties did not immediately respond to a request for comment.

Class members for the case include all U.S. individuals who “opted into the June 2021 Dogecoin sweepstakes sponsored by Coinbase Inc. and who bought, sold or traded Dogecoins on the Coinbase trading platform for an aggregate $100 (USD) or more between June 3, 2021, and June 10, 2021, inclusive,” the plaintiffs say in their final approval motion.

Class members do not need to submit any claim to receive a class payment from the settlement. Each member will receive an award equal to the estimated amount of transaction fees and spreads they paid for their first $100 in Dogecoin trades during the settlement period.

Following final approval, class members will get their allotted payment into their existing Coinbase account. Class members who have closed their Coinbase account will receive a check in the mail.

The attorneys in the case requested $750,000 from the settlement to cover their fees and $75,000 for other costs. The lawsuit’s lead plaintiffs asked for $7,000 each for serving as class representatives.

In their motion for final approval, the plaintiffs said the case for settlement approval “has only strengthened over time.” They added that only one of over 400,000 class members contacted excluded themselves from the class, and none have objected to the settlement.

“Such an extraordinary acceptance of this settlement by the class counsels strongly in favor of final approval,” they said.

During a hearing considering final approval, Kim said she found the settlement proposals to be “adequate.” However, she asked the parties to revise the proposed order to set aside $100,000 until post-distribution accounting is complete, before she signs off on the final approval.

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