On June 23, the U.S. Supreme Court ruled in favor of cryptocurrency exchange Coinbase in a dispute over enforcement of its arbitration clause.Reuters report.
The court issued an order to stay one of the pending customer lawsuits, Bielski v. Coinbase, and the exchange continued its appeal. The second lawsuit was dismissed by the Supreme Court after reconsideration and will proceed to arbitration.
The ruling (5-4 split) cemented arbitration as a viable dispute resolution method that companies often prefer to arbitrate over litigation.
It also overturned an earlier lower court decision allowing both cases to proceed even after Coinbase appealed the denial of the original application for arbitration.
An arbitration clause is an agreement between parties requiring that disputes between them be resolved by arbitration rather than in court.
Abraham Bielski has sued Coinbase after alleged scammers stole $30,000 from his account in 2021. The lawsuit alleges that the company violated the Electronic Funds Transfer Act by failing to fully investigate the case and failing to compensate Mr. Bielski.
A second lawsuit, dismissed by the Supreme Court, was brought by a group of Coinbase users, accusing them of exchanging false advertisements in connection with a 2021 sweepstakes in which Dogecoin was offered as a prize.
Coinbase asked a lower court to compel two cases to arbitrate under its terms of service requiring users to resolve their issues through arbitration. The request was denied, and the company filed an appeal with the San Francisco Court of Appeals for the Circuit.
However, the lower courts did not stay the case despite pending appeals, forcing Coinbase to file a case with the Supreme Court.
win the arbitration
The Supreme Court’s ruling is a win for Coinbase and other companies that rely on arbitration clauses, but companies must ensure that arbitration agreements are transparent and fair to all parties involved.
It is imperative for users of cryptocurrency platforms to read and understand the terms and conditions before using any platform involving hard-earned assets.
Supreme Court ruling in favor of Coinbase means arbitration has been recognized as a legal means of dispute resolution, highlighting the importance of transparent terms of service for companies operating within the cryptocurrency industry. .
It was first listed on CryptoSlate after the Supreme Court ruled in Coinbase’s favor and issued an order moving user lawsuits to arbitration.