Users of cryptocurrency exchanges sometimes end up in disputes with the exchanges. Common reasons include:
- Accounts may be locked by exchanges;
- Funds may be improperly removed from the account;
- Transactions may not be properly executed.
In any of these situations, users often first reach out to the exchanges for support. For many users, however, customer support is slow or inept or both. After numerous calls, emails and chat conversations, customers then look to their next option and most seek to take the next step by bringing a claim against the exchange.
The critical document in determining what the next step is the user agreement or terms of service. These documents typically provide a procedure for dispute resolution. The agreements will most likely have a provision requiring arbitration or bringing the claim in small claims court (which will not be an option for many users because of the magnitude of the loss).
Jeffrey Berk v. Coinbase, a case decided in December 2020 by the 9th Circuit Court of Appeals, looks at the application of Coinbase’s arbitration clause and shows what can happen if claims are filed in court. The case was filed in March 2018, yet almost two years later, the Court sent the matter to arbitration because the language in Coinbase’s user agreement provided for mandatory arbitration.
Filing a case in the wrong court or ignoring an arbitration requirement can lead to huge delays. Avoid timely delays and contact us today so we can help guide you down the right path