A California court has rejected online cryptocurrency exchange Kraken's attempt to appeal a customer's lawsuit. Kraken's unsuccessful interlocutory appeal sought to overturn the decision that keeps the lawsuit on the horizon for the digital exchange platform.
A Californian judge has dismissed a preliminary appeal attempt by Kraken, a leading cryptocurrency exchange platform. As a result, Kraken will face a lawsuit lodged by one of its customers.
Background of the Lawsuit
The lawsuit stems from a situation that occurred in May 2017 when a glitch in Kraken’s system caused the plaintiff to lose a significant amount of his cryptocurrency investment. The glitch, which Kraken has referred to as a “DdoS attack”, led to a significant drop in the price of Ether, leaving the plaintiff and many others with substantial losses.
The plaintiff initially filed the lawsuit against the San Francisco-based cryptocurrency exchange in 2019. However, in a turn of events, the Californian court has now denied Kraken’s interlocutory appeal to stop the lawsuit.
Kraken’s Unsuccessful Appeal Attempt
Under U.S. law, an interlocutory appeal is a legal recourse used by a party that disagrees with a court ruling before the final judgement of a case. Kraken had hoped that by launching an interlocutory appeal, they would overturn the court’s decision and subsequently avoid the impending litigation.
However, the California judge presiding over the case ruled against the appeal, explaining that Kraken did not provide sufficient legal grounds for an interlocutory appeal. Accordingly, the lawsuit is set to proceed against the cryptocurrency exchange platform.
Implications for Kraken and Other Cryptocurrency Exchanges
This development could have far-reaching implications not just for Kraken, but for other cryptocurrency exchanges as well. It signifies the continued efforts by customers to hold these platforms accountable for technical glitches and other issues that lead to significant financial losses.
Beyond that, it also highlights the potential legal pitfalls that cryptocurrency exchanges could face if they do not adequately protect their platforms against glitches that could harm customers.
Conclusion
The dismissal of Kraken’s appeal attempt marks a significant turn of events as the cryptocurrency exchange platform continues to face potential legal consequences over a system glitch that occurred more than four years ago. It remains to be seen how this case will unfold and what implications it could have on Kraken’s operations and the broader cryptocurrency exchange market.
Additional Information
- Kraken is one of the world’s largest and oldest cryptocurrency exchanges, founded in 2011.
- The lawsuit could impact the reputation and trust customers place on cryptocurrency exchanges like Kraken.
- The case serves as a reminder to cryptocurrency exchanges to invest in system upgrades and robust security measures to protect their customers’ investments.
