US Supreme Court To Hear Coinbase Arbitration Bid

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Coinbase is looking to settle two legal actions taken against it by customers through arbitration and not within a judicial court.

The United States Supreme Court has agreed to grant audience to Coinbase’s appeal, as the top American cryptocurrency exchange reveals that it is looking to resolve two lawsuits filed by customers through a private arbitration action outside the confines of a legal, judicial court.

The decision to hear the appeal was reached by the Supreme Court on Friday, as first reported by Reuters. The development comes shortly after federal district judges refused Coinbase’s previous requests to take the case to private arbitration.

One of the judges – a California district court judge – ruled that the arbitration agreement enshrined in Coinbase’s terms is not valid under California’s laws. The other district judge deemed Coinbase’s arbitration request unlawful. Notably, provisions from the United States Arbitration Act demand that arbitration agreements between a firm and its customers be spelled out in the company’s terms.

Now, Coinbase will have the opportunity to present its arbitration case to the Supreme Court following the decision by the Court to give it a hearing. “We are gratified the Supreme Court agreed to hear our appeal, and we look forward to its resolution of this matter,” Neal Katyal, an American lawyer representing Coinbase, said, speaking on the decision.

The Supreme Court’s decision in the hearing will determine the outcome of an age-old legal challenge: whether or not the law requires a party within litigation to remain subject to judicial proceedings by a district court despite appealing to transfer the case to private arbitration.

Notwithstanding the consensus amongst corporate groups that private arbitration is a preferred means of settling company-consumer disputes, as it is faster and more efficient, the plaintiffs’ counsels argue that the resolution mode is only favorable to the firms. A public lawsuit is preferable, as filing suits for larger groups of aggrieved clients can achieve broader relief.

“We don’t think that companies like Coinbase should be entitled to an automatic stay of litigation after a district court has already determined their arbitration is unlawful,” remarked Glenn Chappel, a lawyer to one of the aggrieved customers, noting that the plaintiffs’ attorneys had argued against having the Supreme Court take up the case.

The Lawsuits Against Coinbase

The first lawsuit against Coinbase involved a $5 million class action from a disgruntled Dogecoin proponent David Suski who claims that Coinbase tricked him and several others into paying to enter Dogecoin sweepstakes that they could have otherwise partaken in for free. According to Suski, he paid $100 and would not have done so if Coinbase explicitly revealed that it could be entered for free.

The second complaint was filed by Coinbase user Abraham Bielski who got duped $31,000 when he inadvertently gave remote access to his Coinbase account to a scammer last year. Bielski sued Coinbase, claiming that the actions taken by the exchange following the incident were “meager and ineffective.”

As previously reported, the United States High Court threw out Coinbase’s request to pause both lawsuits in August. The exchange has also received several probes from the United States Securities and Exchange Commission over assets listed on its platform and its staking program.

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