On Friday, the U.S. Supreme Court decided to take on a case involving Coinbase’s attempt to shift a legal disagreement with its cryptocurrency exchange users from the public court system to a private arbitration process. Many companies favor arbitration over going through the formal court system.
This decision by the Supreme Court comes almost a year after Judge Sallie Kim, for the U.S. District Court for the Northern District of California, denied Coinbase’s request to resolve the dispute through arbitration, according to a decision from December 2022.
The case revolves around two different contracts. One contract suggests that arbitration should be used to resolve the issue, while the other contract mandates that the matter be addressed in a California court.
In June 2021, David Suski, who was using Coinbase, entered a Dogecoin Sweepstakes and agreed to some terms and conditions set by Coinbase, which included a rule about resolving disputes through arbitration.
Suski then later opted into separate “officials rules” for the sweepstakes, which included a clause that California courts would have “exclusive jurisdiction over any controversies regarding the sweepstakes,” said Kim.
Coinbase argued that the terms and conditions in the initial user agreement should have been more important than the separate sweepstakes rules, but a judge in California disagreed with Coinbase’s argument.
The case will likely be argued in front of the U.S. Supreme Court sometime in spring 2024.