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Coinbase Made an Arbitration Case to the U.S. Supreme Court – Again
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Jesse Hamilton
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Coinbase has again asked the U.S. Supreme Court to reinforce its position in a dispute over arbitration – marking a second time the crypto exchange has appeared before the high court to argue how customer disputes should be handled.
Wednesday’s arguments weren’t about crypto, but arbitration is a topic that affects anybody who has any interaction with modern commerce.
Crypto exchange Coinbase (COIN) again led a legal charge on the ins and outs of arbitration in the U.S. Supreme Court on Wednesday. The latest case isn’t about digital assets, directly, but it may be important for every modern consumer who buys, registers or contracts for a product or service – and for the businesses trying to stay out of court.
Lawyers for Coinbase, who had previously won a case about whether a lawsuit can move forward if there’s an ongoing appeal about whether it should be in arbitration, appeared again in another case stemming from the legal agreements that control how disputes between companies and their clients are handled. This one is about who should make the decision about a dispute going into arbitration in the event that multiple contracts affect the parties.
These highly technical legal matters have nothing to do with crypto, except for the fact that the industry is as reliant on arbitration agreements as any other corner of the tech sector. These agreements often require that unhappy customers take disputes to a third-party arbitrator rather than pressing lawsuits in the courts.
Coinbase, which contends that an arbitrator should decide where such a conflict should be handled, lost in the lower courts and asked the justices to reject those rulings and remand the case back to the earlier court.
“Lower courts cannot collapse the who-decides questions,” Coinbase’s chief attorney in the case, Jessica Ellsworth of Hogan Lovells, said to the justices on Wednesday. “We think the court should reverse and remand.”
Eventually, the Supreme Court is likely to weigh questions that are central to the nature and survival of crypto in the U.S. – namely, what makes a digital asset a security or a commodity, and what are the government’s powers to oversee the markets where such assets change hands. But those cases are still winding through lower courts and may not rise to the high court’s consideration for many months or even years.
