Coinbase Secures Victory in Arbitration Case
- Friday’s ruling allows Coinbase to continue its attempt to compel arbitration.
- A Coinbase customer previously accused the exchange of doing little to help him recover his missing funds.
- Arbitration is a form of alternative dispute resolution that takes place out of court. The conflict is often settled by one or more people.
On Friday, June 23, the Supreme Court ruled in favor of crypto exchange Coinbase to grant companies legal rights to refer customer and employee conflicts to arbitration. Coinbase previously argued that consumer concerns should be handled through arbitration since it saves on legal fees.
The justices reportedly voted 5-4 that lawsuits filed in a federal court must be suspended while a defendant files an appeal that would move the issue to arbitration.
Writing on behalf of the majority, Justice Brett Kavanaugh remarked that,
The sole question here is whether the district court must stay its pre-trial and trial proceedings while the interlocutory appeal is ongoing. The answer is yes: The district court must stay its proceedings.
Coinbase is currently facing a lawsuit filed by its user Abraham Bielski, who claimed that the exchange owes him $31,000 in damages for the money he lost when he provided a fraudster remote access to his account.
Bielski accused Coinbase of offering little assistance to help him recover his stolen funds. He claimed that the exchange’s refusal was a violation of the Electronic Funds Transfer Act and Regulation E.
Another suit claims that Coinbase operated a $1.2 million Dogecoin sweepstakes and failed to fully explain that contestants didn’t have to purchase or sell Doge. The complaint claimed participants felt obliged to buy or sell $100 in Dogecoin to stand a chance to win the prize. However, some traders felt misled after discovering that traders who didn’t trade dogecoin could participate in the contest.
At first, the U.S. District Court for the Northern District of California denied Coinbase’s move to force arbitration. In addition, Coinbase’s effort to appeal that decision was also unfruitful. However, Friday’s ruling allows Coinbase to continue its push for arbitration.
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