U.S Top Court Rejects Coinbase Request to Pause Lawsuits.
The United States High Court has denied cryptocurrency exchange Coinbase’s appeal to suspend litigations in two lawsuits launched by its account holders for misconduct over issues relating to scams.
Coinbase Request to Halt Ligations Denied
Coinbase had earlier this month submitted an application to Justice Elena Kagan to pause ligations and discovery, claiming that allowing the suits to move forward. At the same time, it seeks to pursue arbitration that would cause irreparable harm to the firm.
However, the court failed to grant Coinbase’s request to suspend the rulings, and Justice Kagen also refused to handle the case.
The leading American exchange is facing two separate lawsuits from its users, with Abraham Bielski seeking compensation for the $31,000 losses he incurred after unknowingly giving scammers who pretended to be working with PayPal access to his account.
Coinbase said it specifically warns its users against this type of scam in its user agreement which the plaintiff signed. However, Bielski stated that the company was not responsive to his efforts to contact it after the incident.
The crypto company argues that since Bielski signed the user agreement with a section containing a delegation clause compelling arbitration, the case should go through arbitration.
The judges, however, disagreed on the basis that it violates general contract principles and therefore cannot be enforced.
Coinbase Under SEC Probe Over Staking Programs
Coinbase has recently found itself in a series of troubles after its controversial first quarter (Q1) disclosures and filing with the United States Securities and Exchange Commission (SEC).
The filing implied that custodial-held assets could be considered as part of the company’s property in a case of bankruptcy, and customers would be treated as “general unsecured creditors,” causing panic among users.
Last month, the Commission launched investigations against the exchange to understand whether it sold unregistered securities to American investors.
Coinbase has come up on the SEC radar again over its staking programs that allow users to earn passive income from locked cryptocurrencies, according to a Bloomberg report.
The company has received an investigative subpoena by the Commission to present documents and information relating to certain programs and operations, including existing and intended products on the platform.
As reported by The Crypto Basic that top law firms Bragar Eagel & Squire And Pomerantz LLP Filed Lawsuit Against Coinbase. Coinbase is also Facing SEC Investigations for Trading Tokens Deemed As Securities.