2023-06-23 19:50:41
© Reuters. Coinbase logo in Times Square in New York, USA 04/14/2021 REUTERS/Shannon Stapleton
By Andrew Chung and John Kruzel
WASHINGTON (Reuters) – The U.S. Supreme Court on Friday ruled in favor of cryptocurrency exchange Coinbase (NASDAQ:) Global’s request to stop customer lawsuits as the company seeks to transfer disputes to arbitration. private, more preferred by companies instead of legal disputes.
The judges, in a 5-4 decision, overturned a lower court ruling involving a user who sued the exchange after a scammer stole money from his account.
The lower court had allowed a proposed class action lawsuit to proceed while Coinbase pressed its appeal on the grounds that the claims should be submitted to arbitration. The judges rejected a second case that Coinbase requested to be reviewed.
Businesses generally prefer to have claims go through arbitration because the process is cheaper and faster than litigation in court, which can be more difficult to fight and carries a greater risk of hefty damages.
Coinbase claims its user agreement requires disputes to be resolved through arbitration and that under the Federal Arbitration Act, which governs dispute resolution procedures through arbitration, actions in lower courts must be stopped. when a denial of a claim to compel arbitration is appealed.
Conservative Justice Brett Kavanaugh, along with four other Conservative justices, drafted the decision.
One of the cases involved a California lawsuit filed by client Abraham Bielski, who claimed that a scammer stole more than $30,000 from his Coinbase account in 2021. The lawsuit accused the company of violating the Electronic Funds Transfer Act by failing to investigate or recredit Bielski’s account.
In another lawsuit that the court threw out on Friday, former users accused the company of violating California’s false advertising law by tricking them into paying to enter a 2021 sweepstakes that offered prizes in dogecoin, a type of cryptocurrency. .
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