US Supreme Court to Decide Whether Coinbase Can Force Customers Into Arbitration

The U.S. Supreme Court has agreed to take up the Coinbase case concerning whether the crypto exchange can force users to settle disputes through private arbitration, rather than in court. The case stems from a dogecoin (DOGE) sweepstakes in which users accused Coinbase of false advertising.

Coinbase’s Case Goes to Supreme Court

The U.S. Supreme Court announced Friday that it will hear Coinbase’s appeal regarding whether the crypto exchange can force users to settle disputes through private arbitration, rather than in court.

The case involved Coinbase’s sweepstakes in 2021 that offered entrants the opportunity to win prizes of up to $1,200,000 in meme cryptocurrency dogecoin (DOGE). A number of users alleged that they were deceived into paying to participate in the sweepstakes even though there was an option to participate for free. Accusing Coinbase of false advertising in violation of California law, the users filed a class-action lawsuit against the cryptocurrency exchange.

The users want the disputes heard in California court. However, the crypto platform argued that when users signed up for Coinbase accounts, they agreed to resolve all disputes with the company through arbitration.

While acknowledging the arbitration clause in Coinbase’s User Agreement, a federal judge in California denied the crypto exchange’s request to move the disputes into arbitration. “The district court determined that a separate forum selection clause in the Sweepstakes ‘Official Rules’ superseded the User Agreement’s arbitration agreement, including its delegation clause,” states the document Coinbase filed with the Supreme Court.

Coinbase appealed the denial of the motion to compel arbitration. However, the Ninth U.S. Circuit Court of Appeals in San Francisco affirmed the denial of Coinbase’s motion. It is now up to the Supreme Court to decide whether the crypto exchange can force users into arbitration.

Do you think the U.S. Supreme Court will rule in favor of or against Coinbase? Let us know in the comments section below.

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