Compelling Arbitration of Claims by Plaintiff Who Did Not Sign Arbitration Agreement

Coinbase, which pays cash for bitcoin, had an arbitration clause in its contract with its customer, Crypsty, which used Coinbase's services to steal from Crypsty's customers. One of those customers, Leidel was one of the individuals who filed a putative class action against Cryptsy. Leidel and  Cryptsy's receiver then sued Coinbase, alleging Coinbase aided Cryptsy’s breaches of fiduciary duty, theft, negligence, and unjust enrichment. Plaintiffs alleged Coinbase had these duties pursuant to various federal statutes and regulations.

Coinbase moved to compel arbitration, arguing the receiver was bound by the arbitration clause that Cryptsy formed, and that the doctrine of equitable estoppel bound  Leidel the arbitration clause because his claims relied on a duty owed by Coinbase to Cryptsy’s customers that arose—if at all—under the contract including the arbitration clause.

The Eleventh Circuit affirmed denial of the motion to compel arbitration because Leidel's claims allged breach of duties imposed by the Bank Secrecy Act rather than bearing a significant relationship to the arbitration agreements.

Commentary from Manatt Phelps & Phillips LLP which provides this copy of the Eleventh Circuit's opinion

Hat Tip to Tom Witherspoon