A federal judge has approved Coinbase’s decision to dismiss a lawsuit that claimed the cryptocurrency exchange operator had permitted insider trading connected to its December 2107 launch of bitcoin cash (BCH) trading.
The ruling, filed on Tuesday by U.S. District Court Judge Vince Chhabria, terminated Jeffrey Berk’s assertions, noting that he was unable to bring forward legal basis for his claim that Coinbase was responsible for losses connected to the infamous BCH rollout, which witnessed the bitcoin cash price increase sharply prior to the surprise launch.
Judge Chhabria noted:
“Taking Berk’s negligence claim as an example, Berk fails to describe the scope or content of Coinbase’s duty in anything more than broad generalities. A reader of the Complaint is thus left wondering what Coinbase should have done differently, or why the rollout of Bitcoin Cash would have gone more smoothly had Coinbase done whatever Berk thinks is appropriate.”
Although at first, some had described the decision as a “win” for Coinbase, Stephen Palley, a litigator who leads legal firm Anderson Kill’s blockchain and cryptocurrency group, noted that the order was indeed a “mixed bag” for the company.
Making one exception, the judge terminated the plaintiff’s reports without prejudice, giving him a 21-day window to change his complaint to place it on more solid legal grounds.
In addition to allowing the plaintiff to change the lawsuit and also take another move at the exchange operator, the judge terminated Coinbase’s decision to force Berk into arbitration, noting that the firm’s required arbitration clause does not basically apply to market manipulation reports. According to Pally, this ruling could result in the cryptocurrency exchange having issues when trying to force customers into arbitration in the future.
“You can win a motion and lose at the same time,” he ended.