LS Case Lawyer US Supreme Court to Hear First Crypto Case Tuesday

US Supreme Court to Hear First Crypto Case Tuesday

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The US Supreme Court will hear arguments in its first-ever crypto-related case on Tuesday, when lawyers for San Francisco-based crypto exchange Coinbase will attempt to convince the nine Justices to pause a pair of class-action lawsuits against the crypto exchange.

Though the case the high court will hear Tuesday involving crypto, it is not itself a crypto case. Instead, this case is a fairly esoteric, procedural argument over whether a lawsuit can proceed in federal court while one party – in this case, Coinbase – is attempting to send the dispute to arbitration.

Coinbase is in the process of appealing an earlier decision by a federal court in California allowing the two lawsuits, Bielski v. Coinbase and Suski v. Coinbase, to continue, in contrast to Coinbase’s user agreement, which requires disputes to be sent to arbitration. Arbitration is an out-of-court method of dispute resolution in which the odds are often unfairly stacked against consumers.

The US District Court for the Northern District of California denied Coinbase’s motion to compel arbitration in the Bielski case last April, arguing the exchange’s arbitration clause as written is “unconscionable” and uses a “litigation gimmick” to disadvantage users in the case of a dispute . When Coinbase appealed with the next-highest court, the San Francisco-based 9th US Circuit Court of Appeals, in July, the decision was upheld.

Coinbase has become something of a magnet for class-action lawsuits, with judges swatting down some attempts and allowing others to forge ahead. The suits have covered a wide range of issues, from allegations the exchange sold unregistered securities (after the US Securities and Exchange Commission deemed certain tokens to be securities) to claims the exchange mishandled its public listing.

Still other lawsuits have been tied to complaints about hacks and lax security, including Bielski’s, which alleged that Coinbase broke the law in failing to reimburse him for over $31,000 he lost after being targeted by a scammer posing as a PayPal representative.

The other case the Supreme Court will review on Tuesday, Suski v. Coinbase, concerns a million-dollar sweepstakes event the exchange held in June 2021. Suski and other customers say they were misled by advertising that suggested they needed to buy or sell $100 in dogecoin for a chance to win, when in reality users who didn’t t trade dogecoin were also eligible.

As the lawsuits continue to mount, Coinbase has been forced to play an increasingly frantic game of legal whack-a-mole. If the exchange gets its desired outcome from the Supreme Court, future suits could be forced into arbitration – which makes it easier for Coinbase to deal with them.

Even though the eventual decision will not set a precedent either way for the most important issues facing crypto, it could have a significant impact on the emerging litigation landscape in the crypto sphere. It would also have wide-ranging implications for other crypto companies that have increasingly been targeted by class-action lawsuits.

The court will convene in Washington, DC, at 10:00 am ET on Tuesday, with this case the second on the docket. Oral arguments are expected to last 60 minutes.