The U.S. Supreme Court to Hear Coinbase Case
The U.S. Supreme Court has announced that it will hear Coinbase’s appeal regarding whether the crypto exchange can require users to settle disputes through private arbitration instead of going to court.
The Background of the Case
The case revolves around a sweepstakes held by Coinbase in 2021, where participants had the chance to win up to $1,200,000 worth of dogecoin (DOGE). Some users claimed that they were deceived into paying to enter the sweepstakes, even though there was an option to participate for free. These users filed a class-action lawsuit against Coinbase, accusing the company of false advertising and violating California law.
Disagreement Over Venue
The users want the disputes to be heard in a California court. However, Coinbase argues that when users signed up for accounts, they agreed to settle all disputes through arbitration with the company.
A federal judge in California acknowledged the arbitration clause in Coinbase’s User Agreement but denied the exchange’s request to move the disputes into arbitration. The judge determined that a separate forum selection clause in the Sweepstakes’ “Official Rules” superseded the User Agreement’s arbitration agreement. Coinbase appealed this decision, but the Ninth U.S. Circuit Court of Appeals upheld the denial of their motion.
Supreme Court Decision
Now, it is up to the Supreme Court to decide whether Coinbase can compel users into arbitration or if the disputes should proceed in court.
Hot Take: Supreme Court Set to Rule on Coinbase’s Arbitration Policy
The U.S. Supreme Court has agreed to hear Coinbase’s appeal regarding its ability to enforce private arbitration for dispute resolution instead of going through court proceedings. The case arose from allegations of false advertising in a dogecoin sweepstakes. Users claimed that Coinbase deceived them into paying for entry when there was an option to participate for free. Coinbase argues that users agreed to settle all disputes through arbitration when signing up. The Supreme Court’s decision will have significant implications for the use of arbitration clauses in the crypto industry and beyond.
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