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Coinbase Updates Its Arbitration Clause
In March 2025, Coinbase updated its customer account agreements to include a new arbitration clause. This can have an effect on investors who have legal disputes involving their Coinbase account. The new account agreement, including the Arbitration Agreement, can be found here.
Coinbase is well-known as being a platform where investors can buy and sell cryptocurrency investments such as Bitcoin or Ethereum. As of December 2024, Coinbase had $404 billion of assets on its platform (according to the Coinbase website) and is the only major publicly traded cryptocurrency exchange in the United States. Thus, it is no surprise that many U.S. investors trust and use Coinbase to trade crypto.
The new Arbitration Agreement went into effect for investors who signed up for Coinbase on or after March 27, 2025. Starting May 15, 2025, the Arbitration Agreement will be updated for existing Coinbase account holders.
What Did the Coinbase Arbitration Agreement Previously Require?
Under Section 7 of the customer account agreement, customers agree to try to resolve any issues with Coinbase through its support team first. If the customer and Coinbase are unable to resolve the issue, the customer agrees to use the Formal Complaint Process outlined in the customer agreement. If that is unsuccessful, then the customer must file an arbitration claim as outlined in the Arbitration Agreement.
Under the previous Arbitration Agreement, customers agreed to bring any legal claim before the American Arbitration Association (or “AAA”). The American Arbitration Association would administer the case under its Consumer Rules. Moreover, the arbitration case would be held in the county where the customer resides. Additionally, if the arbitration matter is considered to be a “Batch” arbitration (where the number of claimants or investors exceeds 100 people), then the cases could be consolidated into one matter under AAA.
What are the major changes with Coinbase’s Arbitration Agreement?
Under the new Arbitration Agreement, the arbitration provisions are very similar, but there are some new nuances. First, if the customer’s claim could be resolved in Small Claims court in their local county court, then the case would be resolved in that Small Claims court and not in arbitration.
Secondly, if AAA is unable or unwilling to administer the case, or if the case is considered to be part of a Batch arbitration, then the arbitration would proceed before JAMS, another arbitration forum. Additionally, the new Arbitration Agreement lowered the threshold for Batch arbitrations to be where the number of claimants or investors exceeds 25 people (while the old agreement had a higher threshold at 100 investors). This could be detrimental to investors, as the JAMS forum tends to be much more expensive than cases administered under the Consumer Rules at AAA.
Who Do I Call For Coinbase Investment Losses?
If you are having issues with Coinbase and want to determine what your options are, please contact one of our experienced investment fraud attorneys at Israels & Neuman PLC. Israels & Neuman has experience representing investors in several arbitration forums, including AAA, JAMS, and FINRA, and can guide investors through the arbitration process.