Coinbase Wins Supreme Court’s Favor in Arbitration Dispute

The Supreme Court has sided with America’s largest cryptocurrency exchange, Coinbase, in a ruling that reinforces the ability of companies to channel customer and employee disputes into arbitration. 

Coinbase has been arguing to route customer complaints through arbitration because it cuts down on legal costs.

Justices voted 5-4 that lawsuits filed in federal court must be put on hold while a defendant presses an appeal that would send the case to arbitration.

Coinbase Chief Legal Officer Paul Grewal said on Twitter: “We are grateful to the Supreme Court for its careful review. Another example of why I believe in the American court system.”

Justice Brett Kavanaugh wrote for the court that the reasoning behind the decision was that the benefits of arbitrations could be “irretrievably lost” if district courts move forward as an appeal is ongoing. “We conclude that, after Coinbase appealed from the denial of its motion to compel arbitration, the District Court was required to stay its proceedings,” he wrote in the Supreme Court decision.

San Francisco-based Coinbase last year asked the Supreme Court to intervene and halt two lawsuits launched by account holders after the firm appealed the cases in Federal court. At the time, the San Francisco-based firm said it needed the Supreme Court to step in on an “emergency basis.”

The crypto exchange argued that its user agreement contract requires customers proceed with arbitration.

One customer, Abraham Bielski, sought to be compensated for $31,000 in losses after he gave a scammer remote access to his account. While David Suski accused Coinbase of holding a “deceptive digital ad campaign” related to a Dogecoin sweepstakes event in June 2021.

Today’s court decision has implications beyond Coinbase because it bolsters the legal precedent for companies to enforce arbitration agreements with customers and employees.

Editor’s Note: This story has been updated to add details from the Supreme Court’s opinion.