US Supreme Court Refuses to Fast Track Coinbase Arbitration Dispute

Kimberly Robinson and Lydia Wheeler | August 10, 2022

(Bloomberg) -- The US Supreme Court refused to immediately consider if user suits against Coinbase Global Inc. can proceed at the same time the company seeks to send the disputes to arbitration.  

The court denied the cryptocurrency exchange platform’s requests for the justices to intervene in the cases and put proceedings on hold while it fights to settle the litigation out of court.

Two federal trial court judges rejected Coinbase’s requests to send the disputes to arbitration. 

At issue for the justices was whether those trial proceedings could continue while Coinbase appeals the rulings, or whether they must await a ruling from the San Francisco-based 9th US Circuit Court of Appeals on the arbitration question before moving forward.

“Allowing district court proceedings to march onward --through discovery, potential class proceedings, and even a trial -- while the arbitrability question is on appeal” would harm Coinbase in ways that can’t be undone, even if the case is eventually sent to arbitration, the company told the justices in their Aug. 3 request for intervention.

The question has split the appellate courts. According to Coinbase, six circuits require the proceedings to stop while the appeal is ongoing, while three -- including the 9th Circuit -- do not.

One case seeks compensation after a user said he lost $31,000 after turning over access to his account to a scammer. The other case before the court challenged a $1.2 million Dogecoin sweepstakes that failed to disclose the entrants didn’t need to buy or sell cryptocurrency, which the user says violates California law.

In that dispute, the challengers told the court they don’t oppose the request for the court to intervene or put the proceedings on hold, they only oppose Coinbase’s proposed resolution.

The cases are Coinbase v. Bielski, 22A91, and Coinbase v. Suski, 22A92.

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