The Supreme Court will hear arguments in its first case surrounding cryptocurrencies Tuesday, raising the possibility of justices taking on more cases concerning digital assets in the future.
The rise of cryptocurrency, in tandem with recent bankruptcies and fraud in the industry, is prompting legal questions about the speculative digital assets, though the arguments before the court Tuesday are actually procedural in nature and surround a pair of class action lawsuits against crypto ledger Coinbase.
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The question before the nine justices is whether the lawsuit can move forward in court while the company is pushing for an appeal that would send the case to arbitration. Coinbase, one of the leading crypto exchanges, is attempting to handle the cases outside of court after lower courts denied a motion to compel arbitration.
The company is fighting against the claims of Abraham Bielski, who argues Coinbase should compensate him for the $31,000 he lost after he provided a scammer remote access to his account.
One of the cases the company wishes to send to arbitration, Suski v. Coinbase, surrounds a million-dollar sweepstakes event Coinbase hosted in June 2021. Plaintiffs allege they were misled by advertising that suggested they needed to buy or sell $100 dogecoin for a chance to win the sweepstakes when in actuality, users who didn’t trade were entered into the competition.
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Arbitration cases are common in retail businesses with large consumer bases, and other disputes involving crypto ledgers are often handled outside of court.
While the decision made in the case, Coinbase v. Bielski, will not have broad implications on the crypto industry and its legality, it could have major implications for how other companies in the same industry can resolve disputes, as crypto ledgers have been increasingly subject to class action lawsuits.