Since this March, Coinbase has been battling it out in court in an attempt to clear their name from the charge that they let employees trade Bitcoin Cash before it was actually listed publicly. What you may not know at this time is that the original complainants against Coinbase on this subject were a group of investors from its GDAX exchange which has been recently re-branded as Coinbase Pro.
To quickly recap, the specifics of this complaint include the major allegation that Coinbase gave tips to certain inside individuals before the launch was set to happen, so that these individuals could trade Bitcoin Cash in advance, anticipating the typical, initial Coinbase jump in the asset’s price. Part of their evidence for this complaint appears to be the fact that Bitcoin Cash prices went up just before December 20, when it went live on the exchange’s platforms.
The precise law that the accusers say has been violated is reportedly California’s Unfair Competition Law, which seems to include specific provisions like anything that constitutes an “unfair advantage over customers,” being “unfair competition.” Therefore, in a general sense, if these allegations can be proven, they would seem to fall under this law’s scope.
According to an article released today by Coindesk, as of this week, the lawsuit has already been dismissed by one District Judge, on the basis that it is not definitively clear on what it is basing its claims on in a legal sense. In short, the citing of the specific California Law that we mentioned above, does not seem to have been enough for this particular judge. Even so, there is hope for the accusers. Reportedly, Jeffrey Berk, who is representing the investors, was able to get the ability to amend the complaint, which means that he can change the laws his argument is based on and if they are different and make sense to the case, he can then argue it again, with new legal foundations.
After the decision, Berk as quote as saying that he definitely plans to do so. Coinbase representatives apparently refused to say anything on the subject.
What is perhaps even more striking is that at the same time that the judge effectively denied Berk’s claim, he also denied Coinbase’s motion to force arbitration, which would mean Berk and his group would be required to settle with the company in private, outside of court. As the saga moves forward, keep in mind that not only can Berk argue his claim again, Coinbase can also try to force arbitration again. Furthermore, what works in favor of Coinbase’s course of action so far is that one legal expert was quoted by Coindesk as saying that most cases like this which reach this stage, end up in arbitration.
If you are interested in reading the latest court order, check out our link here, courtesy of Coindesk.
By: BGN Editorial Staff