The US Supreme Court has decided to get involved in a legal dispute between Coinbase and its users. The main issue is figuring out whether a judge or an arbitrator should decide which contract governs disputes. This confusion arises from conflicting agreements between the parties – one supporting arbitration and another supporting courtroom litigation.
Initially, Coinbase wanted to use arbitration for dispute resolution, but a complication arose due to a sweepstakes agreement directing disputes to California courts. Customers, unhappy with Coinbase’s advertising practices, took legal action through a class-action lawsuit, challenging Coinbase’s usual arbitration process.
Despite a recent Supreme Court decision leaning in favor of Coinbase, lower courts opposed Coinbase’s push for arbitration. A federal judge in California and the US Court of Appeals for the Ninth Circuit sided with the sweepstakes agreement, favoring courtroom resolution over arbitration.
This legal tug-of-war contrasts with a previous Supreme Court decision, which supported Coinbase’s efforts to pause customer lawsuits and move disputes to arbitration. Throughout this dispute, Coinbase has expanded its services, introducing new trading options like crypto futures trading for eligible retail customers.
The Supreme Court’s decision to take up this case is significant for companies using arbitration clauses. It underlines the court’s ongoing role in defining the differences between arbitration and legal proceedings. The outcome will likely have a lasting impact on how user agreements are formulated and enforced, especially in the dynamic realm of digital currency trading.