The United States Supreme Court made its first-ever ruling on a cryptocurrency case on June 23, deciding in favor of Coinbase. The ruling supports Coinbase’s request to move two California class-action lawsuits into arbitration instead of facing civil court cases. Plaintiffs in the lawsuits claimed that Coinbase failed to provide proper relief after users lost money and engaged in deceptive advertising. However, Coinbase argued that its user agreement required disputes to be handled through arbitration instead of civil suits.
The Supreme Court’s opinion, written by Justice Brett Kavanaugh and supported by four other conservative justices in a 5-4 vote, grants Coinbase’s request for stays and allows its appeals to go through before the class-action suits can continue. This decision provides Coinbase with the same legal treatment given to all companies under the Federal Arbitration Act of 1925.
While this ruling represents a win for Coinbase, it could have a possible ripple effect throughout the crypto industry. The decision underpins the idea that existing laws can be seamlessly applied to cases involving cryptocurrencies. It remains unclear how similar cases against other cryptocurrency companies will be affected, and there is no indication that this case will affect the Securities and Exchange Commission’s ongoing action against Coinbase for breaking US securities rules.
Moving Forward
Moving forward, the ruling may hold significance for other crypto-related cases and their potential outcomes, as the court’s decision affords Coinbase and other crypto firms the legal precedence to handle disputes through arbitration rather than civil court cases.