Crypto firms getting their first Supreme Court appearance
On March 21, the US Supreme Court considered arguments in its first crypto-related case devoted to the Coinbase cryptocurrency exchange. The company’s goal is to move the existing customer lawsuits out of court and into private arbitration. Arbitration is an alternative means of dispute resolution that happens outside of the court system. The Coinbase case is believed to be “the tip of the iceberg on crypto-related litigation.” The rapid development of the cryptocurrency market was accompanied by massive bankruptcies and cases of fraud which called for immediate action from lawmakers and government agencies. The most recent instance was the attempt by the US Securities and Exchange Commission (SEC) to classify crypto assets as securities. Previously, the SEC managed to win similar cases. But when it comes to the Supreme Court, these claims can easily be rejected. Notably, the Supreme Court has the right to limit the power of federal regulatory agencies. One such crypto-associated case is pending in the New York federal court. It involves the SEC and crypto company Ripple Labs Inc which is accused of selling XPR tokens as unregistered securities. Ripple is the sixth-largest digital asset by market capitalization. According to Ripple CEO Brad Garlinghouse, the company will move to the Supreme Court if it loses the case against the SEC. As for Coinbase, it insists that the current lawsuits against the company should be resolved by private arbitration, not by a federal court. Coinbase backed by the Chamber of Digital Commerce seeks to pause litigation since it has appealed to take its case to arbitrage. One of the lawsuits in question has been filed by customer Abraham Bielski who lost $31,000. He claims that he was tricked into giving a scammer access to his Coinbase account. He accused the company of being negligent regarding the safety of users’ funds. Another crypto company Grayscale Investment LLC has also indicated its willingness to take its ongoing case to the Supreme Court. Earlier, Grayscale Investments applied to convert its $15 billion Grayscale Bitcoin Trust into an exchange-traded fund (ETF), but the SEC rejected its application. This case is still pending.