US Supreme Court Ruled in Favor of Coinbase

[Darker45]

While this may not be as big of a deal as it seems, since this is the first time that the US supreme court rules on a case involving cryptocurrency, it's probably worth taking note. Coinbase winning a legal battle in no less than the supreme court and against the lower courts in California will have significant implications.

For a brief backgrounder, Coinbase faced a couple of cases in California involving a user who lost money and "deceptive advertising." Coinbase, then, argued that the cases be dismissed because it's part of the signed user agreement that such complaints be settled through arbitration. The request for arbitration was denied. Coinbase then appealed and requested that while the appeal is in progress the case proceedings be stopped. Once again, California’s district courts decided against Coinbase.

Coinbase ran to the supreme court. There, with a close 5-4 decision, Coinbase prevailed over the California district court's decisions.

Sources:

1. https://cointelegraph.com/news/us-supreme-court-halts-coinbase-cases-first-crypto-ruling
2. https://blockworks.co/news/coinbase-supreme-court-victory

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[Poker Player]

Any special reason why you have posted the thread here and not in the Legal section? Here it is supposed to get more exposure but being a bit technical I think it will soon be buried below many other threads that are easier to answer.

Going to the topic: as I understand it, the issue is that there is an arbitration system enabled to resolve disputes between customers and Coinbase and what the Supreme Court ruled is that the judicial actions have to wait for the arbitration verdict. If the customers act as plaintiffs and do not like the outcome of the arbitration they can file a lawsuit but later.

Arbitration is cheaper for companies than going to court, and as it is a preliminary step, I understand that if a certain percentage of customers see that they lose, they will think long and hard before going to court and possibly losing more money.

At first glance, it does not seem so important, except for what you read at the end of the first article:

The court’s decision affords Coinbase the same legal treatment typically given to all companies under the U.S. Federal Arbitration Act of 1925.

[Faisal2202]

Coinbase winning a legal battle in no less than the supreme court and against the lower courts in California will have significant implications.

Well, i do not think so, that winning this case will make any impact on the Market if that's what you mean by significant implications. Because, these cases are not new, and even when the SEC took hard actions against Coinbase, the Market did not become more volatile but became volatile when Binance was sued by SEC.

The point is, it may not put significant implementations on the market/coin base. And, still, these exchanges will face more regulations but for the moment, i can say US authorities are in full favor of the crypto industry, it feels like they are the true adopter of crypto (hehe) which is not, well, we all will see what are there plans in making crypto so famous (in a positive way).

[Upgrade00]

"As the court wrote in its opinion, “When creating a Coinbase account, individuals agree to the terms in Coinbase’s User Agreement. As relevant here, the User Agreement contains an arbitration provision, which directs that disputes arising under the agreement be resolved through binding arbitration.”
Be rest assured that the terms you agree to are meant to favour and protect this companies and not in your interest whatsoever. They now have the rights to seize your funds and in an event where you're a victim of their negligence you have to settle for arbitration which is less expensive for coinbase than the court.

Rather than have to enter legal proceedings to your assets, store them securely in your address.

[Poker Player]

Rather than have to enter legal proceedings to your assets, store them securely in your address.

This is the "not your keys not your coins" umpteenth case.

[Z-tight]

Coinbase winning a legal battle in no less than the supreme court and against the lower courts in California will have significant implications.

Coinbase didn't win the case as such, because the supreme court didn't give any 'final' verdict on the matter, they have only ruled for the case to follow the correct proceedings, and that's for it to begin through arbitration, because that's the terms that every coinbase user agrees to before using their service.

Rather than have to enter legal proceedings to your assets, store them securely in your address.

This is the "not your keys not your coins" umpteenth case.

Self custody is so important for people to learn, but i think this case is a little bit different. The person who filed this case, Abraham Bielski lost ~ $30,000 in coinbase, though that is a lot of money to keep in an exchange, but many sources say scammers got into his account to steal the funds, he didn't lose it because coinbase collapsed or that they were hacked, i think he lost it because he has bad operational security and this person will probably also lose their funds if they control their keys.

[BenCodie]

The title and content is severely misleading given the more important issues going on against coinbase at the moment. So, they prevailed against a user. Who cares? When do customers not beat their consumers in court?

The SEC vs. Coinbase. That's the real thing to keep eyes on. My bet is that coinbase will be gone by next year.

[Darker45]

The title and content is severely misleading given the more important issues going on against coinbase at the moment. So, they prevailed against a user. Who cares? When do customers not beat their consumers in court?

The SEC vs. Coinbase. That's the real thing to keep eyes on. My bet is that coinbase will be gone by next year.

I don't know why it is severely misleading when it was all there is to it. Coinbase indeed secured a favorable ruling from the US supreme court. But it wasn't against a user like you said. You're the one misleading. The case was against the district courts of California.

The SEC vs. Coinbase; that's another thing. Apparently, I wasn't talking about it.

I don't know how convinced you are that Coinbase will be gone by next year, but if you want to put your money where your mouth is, I'm willing to bet against that. Not only will Coinbase stay by next year, it will stay in the year 2025 and even beyond that.

[Fiatless]

Coinbase winning a legal battle in no less than the supreme court and against the lower courts in California will have significant implications.

Coinbase didn't win the case as such, because the supreme court didn't give any 'final' verdict on the matter, they have only ruled for the case to follow the correct proceedings, and that's for it to begin through arbitration, because that's the terms that every coinbase user agrees to before using their service.

It was a victory for Coinbase because the court granted their prayer. Their plea was that the court should halt the proceeding of California district court civil cases because they bypassed the standard legal process a client should follow to seek redress. The standard was that the customer will seek the position of arbitration before he would seek redress in a law court. Coinbase informed the client to go to the standard arbitration as stated in the terms of service but they moved faster than their shadow.

Some of these clients and government officials see infringement as an avenue to ripe off crypto businesses. California district court hands are tied for now because they will have to wait for the outcome of the arbitration before they go ahead with the legal action. The matter might be settled by arbitration or the case will continue in California district court. This case shows the importance of the terms of service of any organisation.

[Beparanf]

The title and content is severely misleading given the more important issues going on against coinbase at the moment. So, they prevailed against a user. Who cares? When do customers not beat their consumers in court?

The SEC vs. Coinbase. That's the real thing to keep eyes on. My bet is that coinbase will be gone by next year.

I don't know why it is severely misleading when it was all there is to it. Coinbase indeed secured a favorable ruling from the US supreme court. But it wasn't against a user like you said. You're the one misleading. The case was against the district courts of California.

The SEC vs. Coinbase; that's another thing. Apparently, I wasn't talking about it.

I don't know how convinced you are that Coinbase will be gone by next year, but if you want to put your money where your mouth is, I'm willing to bet against that. Not only will Coinbase stay by next year, it will stay in the year 2025 and even beyond that.

I think he is considering the severity of each case involved. One is a case against users regarding their account while they agree on terms while the current case they are facing is much bigger since it’s against SEC and SEC has a legal basis for their case.

I get the insight of your thread that coinbase has a sweet spot on supreme court since their case decision went positive from negative decision on lower court. But their current case involved is really big and we know how lunatic Gensler is.

[Z-tight]

This case shows the importance of the terms of service of any organisation.

The terms of service is very important, but sadly only very few people read it, they only read it when they have a problem to be resolved by the company, and by then it may be late to go back on what you agreed without reading. One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

[joniboini]

One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

It is kinda unfortunate but most people don't read ToS to begin with. Companies have no incentive to make their articles easier to read either since most people don't really argue the ToS before they sign it. Even if some cases blow up and lead to their 'disgusting ToS' being exposed, I bet their profit outweighs the cost at least in the short term.

But their current case involved is really big and we know how lunatic Gensler is.

I've been seeing so much news in the last few months related to his SEC position. If he can stay in his position even after so many people suggest removing him, it would be surprising.

[Fiatless]

This case shows the importance of the terms of service of any organisation.

The terms of service is very important, but sadly only very few people read it, they only read it when they have a problem to be resolved by the company, and by then it may be late to go back on what you agreed without reading. One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

These terms of service are too bulky and many people don't like reading long information. But these terms are important and should determine the choice to either use or shun such a service. Some crypto firms sometimes change these terms of service without fully informing clients. So it has become necessary to read these terms of service periodically to be abreast with these fraudulent changes. I have seen people that believe that thier funds in centralized exchanges are insured by deposit insurance firms, so they can get a refund, this is indeed laughable.

[Zoomic]

This case shows the importance of the terms of service of any organisation.

The terms of service is very important, but sadly only very few people read it, they only read it when they have a problem to be resolved by the company, and by then it may be late to go back on what you agreed without reading. One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

These terms of service are too bulky and many people don't like reading long information. But these terms are important and should determine the choice to either use or shun such a service. Some crypto firms sometimes change these terms of service without fully informing clients. So it has become necessary to read these terms of service periodically to be abreast with these fraudulent changes. I have seen people that believe that thier funds in centralized exchanges are insured by deposit insurance firms, so they can get a refund, this is indeed laughable.

Some companies put some important points of their ToS very far in the middle of the lengthy write up such that before you will get there you are already tired.
Another concern is what is the guarantee that the company will not rewrite the ToS without the customer's consent.

[BenCodie]

The title and content is severely misleading given the more important issues going on against coinbase at the moment. So, they prevailed against a user. Who cares? When do customers not beat their consumers in court?

The SEC vs. Coinbase. That's the real thing to keep eyes on. My bet is that coinbase will be gone by next year.

I don't know why it is severely misleading when it was all there is to it. Coinbase indeed secured a favorable ruling from the US supreme court. But it wasn't against a user like you said. You're the one misleading. The case was against the district courts of California.

The SEC vs. Coinbase; that's another thing. Apparently, I wasn't talking about it.

I don't know how convinced you are that Coinbase will be gone by next year, but if you want to put your money where your mouth is, I'm willing to bet against that. Not only will Coinbase stay by next year, it will stay in the year 2025 and even beyond that.

I think he is considering the severity of each case involved. One is a case against users regarding their account while they agree on terms while the current case they are facing is much bigger since it’s against SEC and SEC has a legal basis for their case.

I get the insight of your thread that coinbase has a sweet spot on supreme court since their case decision went positive from negative decision on lower court. But their current case involved is really big and we know how lunatic Gensler is.

Thanks, you interpreted my post pretty much how I intended I will say reading back on it, it was worded a little poorly so I don't blame Darker45 for his reply.

The title and content is severely misleading given the more important issues going on against coinbase at the moment. So, they prevailed against a user. Who cares? When do customers not beat their consumers in court?

The SEC vs. Coinbase. That's the real thing to keep eyes on. My bet is that coinbase will be gone by next year.

I don't know why it is severely misleading when it was all there is to it. Coinbase indeed secured a favorable ruling from the US supreme court. But it wasn't against a user like you said. You're the one misleading. The case was against the district courts of California.

The SEC vs. Coinbase; that's another thing. Apparently, I wasn't talking about it.

I don't know how convinced you are that Coinbase will be gone by next year, but if you want to put your money where your mouth is, I'm willing to bet against that. Not only will Coinbase stay by next year, it will stay in the year 2025 and even beyond that.

Severely misleading was probably too much.

A better way to put it - this is a pea in the pond compared to the SEC case.

How convinced am I? Not convicted. Just my theory, considering EDX markets will probably blow coinbase out of the water, or even acquire coinbase.

If I were to actually bet, it'd be that coinbase either ceases operations or is acquired by EDX/whichever exchange is monopolised by the US Govt./Wall street/(Insert ruling class here) by 2028.

Next year might be an extreme but I certainly wouldn't say that it's impossible as a black swan event - Coinbase ceases operations, liquidates assets, merges (at least some employment) into EDX over some deal.

[zasad@]

https://www.theblock.co/post/239734/coinbase-users-in-four-states-will-no-longer-be-able-to-stake-additional-asset
Coinbase said retail clients in four states will no longer to be able to add new assets to its staking product while numerous legal proceedings carry on.

Ten states — including Alabama, California, and New Jersey — filed actions against the exchange to halt its staking program within their jurisdictions on the heels of the Securities and Exchange Commission's lawsuit against the firm in June.

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

[Bender Over]

....

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

Calling staked coins "a security" might be considered an extreme compliment. Most POS tokens/coins are really just glorified Ponzi schemes, if we are really honest, is this correct or not?

[zasad@]

....

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

Calling staked coins "a security" might be considered an extreme compliment. Most POS tokens/coins are really just glorified Ponzi schemes, if we are really honest, is this correct or not?

The ponzi scheme works differently. There, old users make a profit at the expense of attracted money from new users. If ecosystem tokens are used and have value, then this is no longer a ponzi scheme. And staking is also different, you can create your own node and maintain the network to get a reward for it.

___
SEC asked Coinbase to halt trading in everything except bitcoin, CEO says
Request would have meant ‘the end of the crypto industry in the US’, according to Brian Armstrong
https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d

[coolcoinz]

The ponzi scheme works differently. There, old users make a profit at the expense of attracted money from new users. If ecosystem tokens are used and have value, then this is no longer a ponzi scheme. And staking is also different, you can create your own node and maintain the network to get a reward for it.

How can something that started as a ponzi scheme stop being one? The way I see it, if a coin was made to scam people, it will remain tainted until the end of its days. There's no bringing back Tera Luna, there's not going to be a new bitcoin exchange run by SBF and we won't see Bitconnect with real value.

Since value came up, you say that if tokens have value they stop being a ponzi scheme. That's interesting.
Don't scam coins have value? People are buying them not knowing what the real value is, but they pay to get them, so these coins must have value before they implode, it's just that this value is faked.
All coins listed on exchanges have value, but it's often value derived from trading and false promises.

[Zoomic]

This case shows the importance of the terms of service of any organisation.

The terms of service is very important, but sadly only very few people read it, they only read it when they have a problem to be resolved by the company, and by then it may be late to go back on what you agreed without reading. One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

These terms of service are too bulky and many people don't like reading long information. But these terms are important and should determine the choice to either use or shun such a service. Some crypto firms sometimes change these terms of service without fully informing clients. So it has become necessary to read these terms of service periodically to be abreast with these fraudulent changes. I have seen people that believe that thier funds in centralized exchanges are insured by deposit insurance firms, so they can get a refund, this is indeed laughable.

I have read somewhere in the gambling section where people alleged that some gambling companies change their ToS without consenting their customers. This is a big fraudulent act and should be punishable. But then, they wouldn't agree that they changed the ToS, they will allege that you mutilated yours. The solution to this could be that the project owners should provide a downloadable format of the ToS such that both parties will have a copy of it.
I also feel lazy to read lengthy ToS. I skip them unless in a project I know is important to me or I'll remain in for a very long term.