Coinbase Loses Bid to Force Arbitration of Crypto Theft Lawsuit

Coinbase Inc. lost its motion to compel arbitration of a potential class action alleging the cryptocurrency exchange platform failed to protect its users’ funds from unauthorized transfers, after a federal court in California said the arbitration agreement in Coinbase’s user agreement is unconscionable.

Abraham Bielski was targeted by a scammer who claimed to be a PayPal representative. Bielski granted remote access to his Coinbase account, which was used to transfer assets worth more than $31,000 out of Bielski’s digital wallet. He claims that Coinbase’s customer service after the theft was unresponsive and ineffective.

Bielski brought claims against Coinbase for violations ...