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  • Sultan Coinbase
  • Coinbase decided to compel arbitration under a mandatory arbitration clause in its use agreement after the plaintiff sued Coinbase for allegedly failing to prevent a fraud permitting a third party to steal more than $ 200,000 from his account.
  • The Court stated that "the explicit acceptance" of the statement reads as follows: "I certify that I am 18 years of age or older, and I accept the terms of use and the privacy policy "was clear enough to inform him that its use was conditioned upon acceptance of the agreement of use, with its arbitration clause
  • Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario and Stephen Palley. These are not legal advice. These opinions are only our opinions and are not authorized by a past, present or future client or employer. We could also change our minds. We have multitudes.

    As always, the Rosario summaries are "NMR" and the Palley summaries, "SDP".

    Sultan Coinbase, E.D.N.Y., 18-934, 1/24/19. [SDP]

    Do you know the "accept" or "accept" buttons on which you click on websites and accept terms of use that you have never really read? Are they really enforceable? Ask a lawyer and you will probably get "it depends." (Facts and circumstances, terms involved, jurisdiction, etc., yada yada covered lawyer). We have discussed these so-called clickwrap agreements in previous instances of CCMs, and this particular case concerns the applicability of an arbitration clause in Coinbase's clickbrap service conditions.

    The complainant sued Coinbase, alleging that it "neglected to prevent a fraud allowing a third party to steal more than $ 200,000 from his account. Coinbase has decided to use arbitration in accordance with a binding arbitration clause in its contract of use. "

    When the applicant registered on the website, he ticked the following box: "I certify that I am 18 years of age or older, and I accept the terms of use and the Privacy Policy. "The agreement of use and the rules of confidentiality were underlined. and links connected to referenced documents. The agreement of use included an arbitration clause containing words in bold type.

    The Court stated that "explicit acceptance" clearly indicated that the use of the site would be subject to reference conditions and "further urge a reasonably prudent user to click on the link to see what these conditions were." d & # 39; use ". before accepting. Thus, the plaintiff was in "notice of investigation" terms. Although he does not remember having clicked on the box "I certify, etc.", the presentation of the website was sufficiently clear to indicate that its use was conditional on the acceptance of the User Agreement, with its arbitration clause.

    From a design point of view, the case is instructive because it describes a presentation which, in the Court's view, makes acceptance of the conditions a precondition for the creation of an account: account creation contains only five fields and two checkboxes. " Meyer [a similar case], "The entire screen is visible at once," id., With a minimalist presentation and no distractions. The request for acceptance of the user agreement and privacy policy appears to be in a font slightly smaller than any other text on the screen, but it is immediately above the "Create an account" and "provided simultaneously with registration" button. In addition, the creation of an account is explicit. acceptance of conditions by checking the box.

    In short, the case has been suspended and the arbitration compelled. (By way of conclusion: that arbitration is better or worse is a matter of opinion.) In some cases, plaintiffs who have weaker arguments may actually do better in a private arbitration. 39 is not necessarily a loss for the plaintiff in the long run.


    The Block is pleased to present a legal expert analysis of cryptocurrency, provided by Stephen Palley (@stephendpalley) and Nelson M. Rosario (@nelsonmrosario). They summarize each week three cryptocurrency cases and gave The Block permission to republish their comments and analyzes in full. Part II of this week's analysis, Crypto Caselaw Minute, is on top.