A Tough Lesson in Trust and Transparency for Coinbase

TL;DR

• Back in 2021, Coinbase started accepting Dodgecoin to be traded on the exchange and launched a campaign where they planned to give away $1.2M worth of DOGE ‘for free.’

• While there was technically a free way to enter the competition, who uses snail mail these days (especially for a competition literally focused around digital currency)?

• Whether Coinbase was in the right or the wrong, this just feels dodgy. If there’s anything we’ve learnt over the past few years about the Web3 industry it’s that the people in this space value trust above all else.

Full Story

Another day, another crypto case in court…sorta.

We say ‘sorta’ because, while this is a class action lawsuit against Coinbase, and it does involve Dodgecoin, it’s not really about crypto.

Lettuce explain.

Back in 2021, Coinbase started accepting Dodgecoin to be traded on the exchange.

To promote their new coin offering, they launched a campaign where they planned to give away $1.2M worth of DOGE ‘for free.’

There were two ways to enter: Buy or sell $100 or more in DOGE; or mail in an entry request without having to trade $100+.

See where we’re going with this?

While there was technically a free way to enter the competition, who uses snail mail these days (especially for a competition literally focused around digital currency)?

Here’s our take on this:

First off, this isn’t a case about whether crypto is a security or commodity, or anything like that. It’s a case about sweepstakes rules.

On one hand, it seems Coinbase didn’t really do anything wrong – they said it was for free and there was a free option to enter.

But on the other hand, it just feels dodgy.

If there’s anything we’ve learnt over the past few years about the Web3 industry it’s that the people in this space value trust above all else.

While so far this hasn’t damaged Coinbase’s reputation too badly, in hindsight, it probably wasn’t such a smart move.

In the end, with legal fees and a potential payout, the promotion probably wasn’t worth it at all.

Lesson learnt (hopefully)!