The US Supreme Court has recently ruled in favor of Coinbase, supporting its request to halt customer lawsuits while pursuing appeals to move the disputes out of courts and into private arbitration. This marks the first time a crypto company has argued before the high court, though the ruling itself does not directly impact the broader cryptocurrency industry.
Coinbase sought to compel arbitration in response to a class action lawsuit filed against the exchange; businesses generally prefer arbitration because it is a cheaper, faster process than litigation and carries less risk of significant damage. With Friday’s ruling, the exchange can continue trying to compel arbitration. However, Justice Brett Kavanaugh wrote that the district court must stay its pre-trial and trial proceedings while the interlocutory appeal is ongoing.
Two dismissed lawsuits against Coinbase were central to this ruling. The first involved a Californian customer who claimed that the exchange did not investigate or refund his $30,000 loss resulting from a scam. The second case alleged that Coinbase tricked former users into paying to enter a 2021 sweepstakes with Dogecoin prizes, thereby violating California’s false advertising law. In both instances, Coinbase appealed earlier lower court decisions that ruled against the exchange’s argument for arbitration.
It is worth noting that the recent win for Coinbase has come during a time of increased scrutiny from US regulators. The US Securities and Exchange Commission recently filed a complaint against the company, alleging that Coinbase operated its crypto asset trading platform as an unregistered national securities exchange and broker. Additionally, the company received Show Cause orders from 11 US states, requiring Coinbase to justify its operations within these states.
While the recent Supreme Court ruling marks a victory for Coinbase, it does highlight the ongoing challenges and regulatory uncertainties that cryptocurrency companies face, especially in the United States. The outcome of this case could potentially influence future lawsuits involving the crypto industry and, as the landscape continues to evolve, create further legal complexities around the rapidly expanding technology.
Source: Cryptonews
