The complaint was brought by a Coinbase customer who claimed the cryptocurrency exchange had wrongly terminated his account and refused to restore his cash.
On June 23, Reuters reported that the U.S. Supreme Court sided with bitcoin exchange Coinbase in a case challenging the enforcement of arbitration provisions.
While the exchange pursued its appeal, the judge stayed in one of the ongoing consumer lawsuits (Bielski vs Coinbase). The Supreme Court rejected a second case after reviewing it and sending it to arbitration.
The decision, divided 5-4, upholds the legitimacy of arbitration to resolve disputes, which corporations often choose over litigation.
After having its arbitration request first denied, Coinbase appealed the decision, which resulted in the reversal of lower court orders and the continuation of both litigations.
Abraham Bielski filed a lawsuit against Coinbase in 2021 because he claimed he lost $30,000 to a fraudster. The lawsuit claimed the company broke the law by neglecting to investigate the incident and pay Bielski back correctly.
The Supreme Court also threw out a case brought by Coinbase customers who claimed the exchange had misrepresented the value of Dogecoin as a prize in a competition held in 2021.
Coinbase’s terms of service mandate that disputes between users be resolved via arbitration; therefore, the company urged lower courts to compel the two cases into arbitration. The corporation appealed the decision to the San Francisco Circuit Court of Appeals when their motion was refused.
Coinbase appealed to the Supreme Court because the lower court had not put a hold on the cases, notwithstanding the ongoing appeal.
Although the Supreme Court’s decision is good news for Coinbase and other firms that utilise arbitration provisions, it is still essential for businesses to ensure that their arbitration agreements are transparent and equitable for all parties.
Before investing any of their money into a cryptocurrency network, consumers should ensure they fully grasp the terms of the service.
The Supreme Court’s ruling in favour of Coinbase indicates that arbitration is a valid dispute resolution technique and emphasises the significance of having open and clear terms of service for companies in the cryptocurrency market.
