US Supreme Court to Hear Coinbase Arbitration Case

The Supreme Court will hear an appeal from Coinbase in two lawsuits against the firm.

The court ruling Friday (Dec. 9) gives the crypto company a chance to argue that the suits against it should be resolved through arbitration and not in court.

As PYMNTS reported, Coinbase is facing two lawsuits from customers, both of which are attempting to rise to the level of class action suits.

In the first case, a customer is asking the company to reimburse him $31,000 he said he lost by giving remote account access to a scammer.

The second case accuses Coinbase of breaking California consumer law by holding a $1.2 million dogecoin sweepstakes without properly disclosing that participants were not required to purchase or sell the cryptocurrency.

The court has previously denied a request from the company to intervene in the case. A federal district court had also ruled against Coinbase’s attempt to seek arbitration.

Glen Chappell, attorney for plaintiff Abraham Bielski, told CNBC this weekend this case could be the first time the Supreme Court has tackled cryptocurrency. He and other plaintiff’s lawyers had opposed Coinbase’s move to take the case to the high court.

“We don’t think that companies like Coinbase should be entitled to an automatic stay of litigation after a district court has already determined their arbitration is unlawful,” Chappell said, adding that the lawyers “still welcome the ability to advocate on behalf of consumers in the matter.”

The court’s decision came days after Coinbase’s CEO said the company’s revenue is likely to plummet by 50% this year.

Brian Armstrong pointed to the implosion of once-time rival FTX as shaking the confidence of crypto investors. But even putting FTX aside, this hasn’t been a good year for the crypto sector, with even the more popularly traded tokens such as Ethereum and bitcoin falling in price.

Coinbase’s own shares have dropped more than 80% this year, as the larger crypto industry suffers a market contraction.