Coinbase wins Supreme Court ruling on arbitration lawsuit.
The U.S. Supreme Court has given cryptocurrency exchange Coinbase a temporary break from a lawsuit filed by one of its users. The high court ruled that until Coinbase defends an appeal of a lower court ruling, the lawsuit cannot proceed. The 5-4 majority ruling allows Coinbase to continue its effort to compel arbitration against the putative class action lawsuit, which halts the lawsuit’s progress through the federal court system. While this ruling is a win for Coinbase, it has little effect on the cryptocurrency industry as a whole.
The ruling confirms that the district court must stay its pre-trial and trial proceedings while the interlocutory appeal is ongoing. Justice Brett Kavanaugh, who ruled on behalf of the majority, stated that this was the sole question that needed answering. Coinbase lost an initial ruling against the putative class action lawsuit when the U.S. District Court for the Northern District of California denied its motion to compel arbitration. It also lost an appeal of that ruling. The lawsuit was originally set to proceed on some of the case’s merits.
Although the Supreme Court’s ruling is specific to Coinbase, it marks the first time that a cryptocurrency company has argued before the U.S. high court. It may have implications for other lawsuits filed against Coinbase. Following the ruling, Coinbase can continue trying to compel arbitration.
Justice Ketanji Brown Jackson authored a dissent with support from Justices Elena Kagan and Sonia Sotomayor. Justice Clarence Thomas signed on to some sections of the dissent. They argued that allowing the case to proceed would enable a balancing of all involved interests.
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The Supreme Court ruling has no direct effect on crypto issues beyond the fact that it involves Coinbase.
Edited by Jesse Hamilton.