Arbitration procedure was initiated after a Coinbase user complained that the company “failed to replace funds fraudulently taken from the users’ accounts.”
Even while the Supreme Court win on Friday had little to do with Coinbase’s more significant issue with U.S. authorities, the company nevertheless used the opportunity to rejoice.
“Another reason I have faith in the American judicial system. The rule of law may be sluggish and disheartening at times. But in a flawed democracy, it’s still our best bet,” Grewal remarked.
The court ruled in favour of Coinbase by a 5-4 margin, giving the exchange more leeway to use arbitration to resolve customer problems. On Friday morning, Justice Brett Kavanaugh issued his ruling.
A class action lawsuit brought by Abraham Bielski in the U.S. District Court for the Northern District of California found that Coinbase “failed to replace funds fraudulently taken from the users’ accounts,” according to the judgement. Whether or not the district court needed to postpone its proceedings was called into doubt when it dismissed Coinbase’s move to initiate arbitration.
“The only issue before the Court is whether or not an interlocutory appeal on arbitrability requires a suspension of proceedings by a district court. The justices evenly said, Yes.
The dissenting opinion was written by Justice Ketanji Brown Jackson, who argued that the judgement might have “significant implications for federal litigation.”
“This need for a universal stay in all cases involving appeals of interlocutory arbitrability is entirely unexpected. It is not required by law. Equally, no ruling by this Court,” Jackson said.
The U.S. Securities and Exchange Commission filed a lawsuit against Coinbase earlier this month for alleged breaches of securities laws, continuing a heated struggle between the two parties over the country’s crypto regulation.
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