The case will be important to Coinbase and other industry players in how the courts should grapple with arbitration matters.
Crypto Exchanges on Tuesday, March 21 Coinbase Global Inc (NASDAQ:COIN) argued in the U.S. Supreme Court that its existing disputes over forcing customers to go to arbitration should actually freeze the courts as arguments unfold. This development breaks the legal foundation for digital assets at the highest court in the industry.
The first crypto case to come to the Supreme Court in the US is not directly about digital assets. But it could still be important for Coinbase and other industry players when they hit customers. This case is basically a dispute on how courts should deal with disputes in the matter of arbitration.
Arbitration is basically an out-of-court settlement or dispute resolution, however, the odds are often stacked against clients. During Tuesday’s hearing, Coinbase argued that whenever a court decides that the customer should settle the matter in a courtroom instead of through arbitration as outlined in the user agreement, the company’s appeals court should keep the matter going until further notice. should be stayed till the appeal is decided.
Neil Katyal, an attorney representing Coinbase, said Congress has done something unusual by allowing immediate appeals whenever a court denies forced arbitration. He also said that there is a “background rule” in which the law does not allow the courts to proceed when used.
However, if the client chooses to move to the stage of exchange of information and evidence, the company may be “forced to settle largely” as some embarrassing information coming to light would negate the purpose of the arbitration. Can “That toothpaste can’t be put back in the tube later,” he said.
Coinbase’s Lack Protection
Tuesday’s hearing revolved around Coinbase customer Abraham Bilsky, who previously argued that a scammer stole $31,000 from his account amid security put in place by the exchange. A court said Belsky could go ahead and pursue that complaint in court, which Coinbase appealed.
While the case continued in court, Coinbase argued that its appeal should have been closed. But Hassan Zawarei, the lawyer representing Bielski Said,
“The entire cryptocurrency market is crumbling under our feet”.
He further argued that any purposeful delay by the company in case the business fails during the waiting period could rob the customer of the opportunity to go after the business. Furthermore, a plaintiff may “wonder whether Coinbase is going to be around”.
During yesterday’s hearing, Chief Justice John Roberts said the power of appeals gives “a huge advantage” to companies that don’t have to wait until the case is over. “This is what they gave you,” he said. “Why isn’t this enough?”
Other judges also threw tough questions at Coinbase’s counsel. Justice Elena Kagan said, “This district court is not stepping on the appeals court,” adding that “both can go their merry ways.”

Bhushan is passionate about Fintech and has a good grasp of understanding the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in the process of continuous learning and keeps motivating himself by sharing his acquired knowledge. In his spare time he reads thriller fiction novels and occasionally explores his culinary skills.
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