Coinbase to Present its Arbitration Case in US Supreme Court

Coinbase Global Inc, a cryptocurrency exchange, contended on Tuesday, March 21, before the United States Supreme Court that its present conflicts on pushing clients into arbitration must effectively freeze the courts while the issues are being played out.

This new legal precedent for digital assets was handed down by the industry’s top court as a result of this event.  The first crypto-related case (1) to be heard by the Supreme Court of the United States isn’t actually about digital assets per se.

Yet, it may still be crucial for Coinbase and other participants in the business if they find themselves in conflict with customers.

This case is essentially a debate over the appropriate course of action for the courts to take in the event of a brawl during the arbitration.

Although arbitration is essentially a dispute resolution or settlement process that takes place outside of court, the odds are typically skewed against the clients.

During the listening on Tuesday, Coinbase contended that if a court decides that a client should resolve the dispute in the courthouse rather than arbitral proceedings as underlined in terms of the agreement, a firm appeal must halt the case from advancing through the courts till the appeal is settled.

Neal Katyal, a lawyer for Coinbase, stated (1) that Congress had achieved something quite rare by permitting rapid appeal anytime a judge denies a forced arbitration.

Katyal was referring to the fact that Congress has made it possible for anyone to challenge decisions made by courts.

In addition to this, he mentioned something called the “background rule,” which is a provision in the legislation that makes it impossible for courts to continue operating once it has been invoked.

Even so, if the clients choose to keep moving into the step of swapping data and proof, the business may be “coerced into a huge settlement,” as some humiliating information surfacing may negate the intent of the arbitral proceedings.

He stated that it was impossible to place the toothpaste into its original container at a later time.


Coinbase’s Weak Security Measures


Abraham Bielski, a Coinbase client who had previously alleged that a fraudster stole $31,000 from his account due to insufficient precautions by the exchange, was the primary focus of the hearing on Tuesday.

Coinbase filed an appeal after one of the courts ruled that Bielski was allowed to continue to pursue that claim in the court system.

Coinbase contended that its appeal should have been dismissed at every stage of the case’s progression in the court where it was being heard.

However, Hassan Zavareei, the lawyer defending Bielski, said:

The entire market for cryptocurrencies is teetering on the brink of collapse right under our feet.

He went on to explain that any deliberate delays on the part of the firm could deprive a customer of the opportunity to sue the company in the event that the company went out of business during the waiting time. Another possibility is that a plaintiff will “question whether Coinbase is going to be around.”

Chief Justice John Roberts stated that the appeal power provides a “great benefit” to firms because they don’t have to wait till the case is over to file an appeal. This statement was made during yesterday’s hearing. He informed me, “This is what they have given you. What makes you think that won’t do?”

Coinbase’s attorney was subjected to intense interrogation from many justices. Elena Kagan, a member of the Supreme Court, stated that “this district court is not stomping on the appeals court,” and she continued by saying that “the two can go their merry ways.”

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