A row over forced arbitrations should temporarily pause courts until debates are resolved, Coinbase has told the United States Supreme Court on Tuesday.
According to reports, the case is not directly linked to cryptocurrencies but could affect cryptocurrency exchanges in disputes with customers.
The case could set a precedent for customers to settle their disputes in courtrooms rather than through channels provided by user agreements.
Neal Katyal, a lawyer for Coinbase, said that “Congress did something very unusual” after it allowed customers to respond to denied forced arbitration by appealing court cases.
He added courts should have a “background rule” to outline that appeal laws did not allow courts to continue when triggered.
Allowing customers to proceed with cases, leading to the exchange of evidence and data, companies could be “coerced into a massive settlement” due to information leaked to the public and press.
He added: “That toothpaste can’t later be put back into the tube.”
But Hassan Zavareei, Bielski’s lawyer, responded: “The entire cryptocurrency market is collapsing under our feet.” He also stated that compulsory delays from companies could block people from pursuing court cases against businesses during the appeal process.
The case, Coinbase Inc v Bielski, Abraham Bielski accused Coinbase of weak protections after a cybercriminal stole $31,000 from his account. Courts approved he could file his complaint and launch a court case, sparking outcry from Coinbase.
Coinbase’s user agreement resolves disputes via the Federal Arbitration Act, which outlines proceedings for resolving disputes. Action in trial courts are forced to pause following appeal denials of compulsory arbitrations.
