U.S. Supreme Court to Decide on Coinbase Dispute: Arbitration or Litigation?
Summary:
The U.S. Supreme Court is considering a legal dispute between Coinbase and its customers regarding which contract governs disputes - one favoring arbitration or another favoring courtroom litigation. This follows allegations of deceptive advertising against Coinbase. Despite lower court resistance and previous rulings in favor of Coinbase, the Supreme Court's involvement marks a critical point for arbitration-clause-using businesses. Amid the legal discussions, Coinbase has expanded its services, offering new trading options.
A legal conflict involving Coinbase and its customers has caught the attention of the U.S. Supreme Court. The bone of contention is who - a judge or an arbitrator - should decide the contract that dictates disputes. The dispute, as Bloomberg reports, springs from clashing contracts between the concerned parties. One contract pushes for arbitration while the other recommends courtroom prosecution. Originally, Coinbase incorporated arbitration clauses into its customer agreements. However, a wrinkle emerged in a sweepstakes contract that directs resolution of disputes to Californian courts. The customers, alleging misleading advertising, launched a class-action lawsuit, challenging Coinbase's standard arbitration route. Lower courts resisted Coinbase's pro-arbitration drive. A federal judge in California, supported by the U.S. Court of Appeals for the Ninth Circuit, upheld the supremacy of the sweepstakes contract favoring courtroom resolution. Consequently, Coinbase's plea to shift the dispute to arbitration was denied. This judicial disinclination comes regardless of a previous Supreme Court ruling, favoring Coinbase 5-4 in a related case. The Supreme court then decided to pause customer lawsuits and supported Coinbase's push to shift disputes to arbitration. Coinbase stays on the front foot amid the ongoing legal tussle. The firm has expanded its offerings, launching new trading options to its users. Eligible retail customers can now partake in crypto futures trading, with contract size suiting the retail clientele that represents a faction of Bitcoin (BTC) and Ether (ETH) value. The Supreme court's decision to consider this case marks a crucial turn for businesses using arbitration clauses. It accentuates the court's ongoing role in distinguishing between arbitration and legal court proceedings. The outcome is expected to influence the creation and application of user agreements, particularly in the ever-transforming world of digital currency trading. In other news, Bitcoin ETF has been announced by Samsung, a $700M bust occurred, and Coinbase has exited the Japan market, according to Asia Express Magazine.
Published At
11/4/2023 10:02:45 AM
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