According to a report from Reuters last week, the U.S. Supreme Court ruled in favor of Coinbase in a dispute involving the enforcement of arbitration clauses.
Justices voted 5-4 that lawsuits in federal court should be put on hold while the defendants forward an appeal that sends the case to arbitration. Coinbase has been pushing for arbitration as the means to resolve disputes filed by users given that it is fairly inexpensive compared to courtroom litigation.
The court issued an order to halt proceedings in a class action lawsuit filed by Abraham Bielski on behalf of other Coinbase users alleging that the exchange failed to reimburse user funds after scammers stole money from their accounts. In the suit, Bielski also claims that the crypto exchange violated the Electronic Funds Transfer Act by not investigating his case thoroughly.
The court also dismissed another lawsuit filed by a group of Coinbase users, accusing the exchange of falsely advertising claims in a Dogecoin sweepstakes in 2021. In both the Bielski case and the sweepstakes case, federal judges refused to suspend court proceedings while Coinbase appealed the right to move the cases into private arbitration, which led the exchange to turn to the Supreme Court.
The ruling from the highest court in the U.S. federal judiciary is a big win for Coinbase and other major crypto exchanges, with the recognition of arbitration as a legitimate method of resolving disputes lodged by users.
“We are grateful to the Supreme Court for its careful review. Another example of why I believe in the American court system. The rule of law is sometime slow, and at times disappointing. But it remains our last, best hope in an imperfect democracy,” wrote Coinbase’s chief legal officer Paul Grewal on Twitter.