Hastings v. Unikrn, Inc.

12 Wash.App.2d 1072 (2020)

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Nature of the Case

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Facts

D runs an online 'esports' entertainment and gambling platform. D is the sole owner and shareholder of its subsidiary, Unikrn Bermuda, Ltd., a Bermuda corporation with its principal place of business in Seattle. Unikrn Bermuda, Ltd. has no employees of its own, and all its business has been conducted through D's officers, directors, and agents. In 2017, Unikrn Bermuda, Ltd. conducted an online public sale of digital tokens, known as UnikoinGold Tokens, that could be used on Unikrn's websites for playing, wagering on, and watching esports. D's employees established a website where users could register for the token sale and purchase UnikoinGold Tokens. The address verification web page displayed a checkbox located next to an affirmation statement underneath the fields requiring users to type in their address. The affirmation statement read 'I have read and understood Unikrn Token sale Terms of Service and the Privacy Policy, and hereby agree to them.' The phrase 'Terms of Service' contained an embedded hyperlink to a document entitled 'UNIKRN BERMUDA LTD TERMS OF TOKEN SALE.' The first section of this document explicitly stated the following: 'PLEASE READ THESE TERMS OF TOKEN SALE CAREFULLY. NOTE THAT SECTION 15 CONTAINS A BINDING ARBITRATION CLAUSE AND CLASS ACTION WAIVER, WHICH, IF APPLICABLE TO YOU, AFFECT YOUR LEGAL RIGHTS. IF YOU DO NOT AGREE TO THESE TERMS OF SALE, DO NOT PURCHASE TOKENS.' A user had to fill in their address and check the box next to the affirmation statement before the web page would permit users to click the 'SAVE YOUR PROFILE' button to proceed with registering for the token sale. A user had to agree with the Terms of service before creating an account. On September 23, 2017, P accessed the website and purchased UnikoinGold Tokens. A year later, P filed a putative class action lawsuit alleging multiple violations of federal securities laws. On September 23, 2017, P accessed the website and purchased UnikoinGold Tokens. A year later, P filed a putative class action lawsuit alleging multiple violations of federal securities laws. D moved to compel arbitration pursuant to the terms of the agreement. D disputed whether he had ever agreed to the terms of that agreement. The court denied D's motion to compel arbitration. D appealed.