Coinbase wins important case in US Supreme Court.

  • The US Supreme Court has ruled that the district court must pause proceedings in a class action lawsuit when an appeal is ongoing.
  • Coinbase filed an appeal after its request to have the case resolved through arbitration was rejected.
  • The ruling comes just days after the SEC sued Coinbase over allegations of violating securities laws.

Coinbase has won a significant victory following the US Supreme Court’s ruling on its appeal over arbitration.

Last Friday, the highest court in the US ruled in favor of the cryptocurrency exchange’s argument, stating that a federal court must pause legal proceedings in a lawsuit where a defendant’s appeal for arbitration is ongoing.

US Supreme Court sides with Coinbase

The Supreme Court’s decision came after the exchange filed an appeal earlier this year after its “motion to compel arbitration” was denied by the US District Court for the Northern District of California.

Coinbase sought to file an interlocutory appeal and asked the District Court to pause the class action lawsuit pending the resolution of its appeal, but this was also denied at the US Court of Appeals for the Ninth Circuit.

“When a federal district court denies a motion to compel arbitration, the losing party has a statutory right to an interlocutory appeal. The sole question here is whether the district court must stay its pre-trial and trial proceedings while the interlocutory appeal is ongoing. The answer is yes: The district court must stay its proceedings,” said Justice Brett Kavanaugh in the Supreme Court’s opinion.

Coinbase is currently facing a class action lawsuit filed by Abraham Bielski at the US District Court for the Northern District of California, in which he alleges that the US-based cryptocurrency exchange “failed to replace funds fraudulently taken from the users’ accounts.”

The Supreme Court noted in its ruling that “Coinbase’s User Agreement provides for dispute resolution through binding arbitration.” This is what prompted the exchange to file for arbitration, which was denied by the lower courts.

“We are grateful to the Supreme Court for its careful review. Another example of why I believe in the American court system. The rule of law is sometimes slow, and at times disappointing. But it remains our last, best hope in an imperfect democracy,” tweeted Coinbase Chief Legal Officer Paul Grewal.

While the majority of the court ruled in favor of Coinbase, Justice Ketanji Brown Jackson dissented, noting that “today’s majority invents a new stay rule perpetually favoring one class of litigants—defendants seeking arbitration.”

According to Justice Jackson, the move could have “significant implications for federal litigation.”

Coinbase was recently sued by the US Securities and Exchange Commission (SEC) over allegations of violating securities laws.

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