On June 23, the United States Supreme Court ruled in favor of cryptocurrency exchange Coinbase in a 5–4 vote. This marks the court’s first crypto-related ruling, and it will halt proceedings in two California class-action lawsuits against Coinbase.
The lawsuits claimed that Coinbase failed to provide proper compensation for users who lost money, as well as engaging in deceptive advertising. However, Coinbase argued that users had signed an agreement when creating their accounts, which stated that disputes would be dealt with through arbitration instead of court action.
The Supreme Court’s opinion, written by Justice Brett Kavanaugh, stated that Coinbase should receive the same legal treatment usually given to companies under the U.S. Federal Arbitration Act of 1925. This ruling means that the district courts in California must now move the cases into arbitration.
This decision is a win for Coinbase, but could also have a wider effect on the crypto industry. It suggests that existing laws can be applied to cases involving crypto, and that companies can use the Federal Arbitration Act to handle disputes.
It is currently unclear how this ruling will affect other crypto companies, or if it will have any impact on the Securities and Exchange Commission’s action against Coinbase. However, this ruling is a reminder that the cryptocurrency industry is subject to the same laws as any other sector.
