In a partisan ruling on June 23, the US Supreme Court ruled in favour of the cryptocurrency exchange Coinbase, putting an end to legal actions brought against it in two California cases.
Coinbase asked the district courts in charge of the cases to dismiss them on the grounds that, according to the company, users agreed to arbitrate disputes instead of filing lawsuits when they created their accounts.
The US Supreme Court ruling marks the first time that the courts in the country have ruled in favour of cryptocurrencies. The ruling was written by Justice Brett Kavanaugh and was backed by four of the court’s five other conservative justices in a 5-4 decision.
In its opinion, the court wrote:
“When creating a Coinbase account, individuals agree to the terms in Coinbase’s User Agreement. As relevant here, the User Agreement contains an arbitration provision, which directs that disputes arising under the agreement be resolved through binding arbitration.”
The two cases against Coinbase will now be referred to arbitration by California district courts, which is ordinarily less expensive for businesses than litigating or resolving disputes in court. Initially, California’s district courts had denied Coinbase’s request for arbitration in the above-mentioned cases forcing Coinbase to file appeals requesting a stay and while the appeals were handled, the courts were inclined to continue the civil cases in spite of the company’s appeals.
Today’s Supreme Court’s ruling grants the stays allowing Coinbase’s appeals to continue before the class-action suits against it can continue. This is not only good news for Coinbase but also for the entire cryptocurrency sector, which is under fire from the SEC.