Coinbase’s New User Agreement: Are Retail Users Being Set Up? Is Your Wallet Safe? 👀
Coinbase’s New User Agreement: Are Retail Users Being Set Up? Is Your Wallet Safe? 👀
PSA for Coinbase Users and Shareholders: Key Risks from User Agreement Changes and the Veritaseum Patent Dispute
1. User Agreement Changes and Arbitration
Coinbase is updating its user agreement, including the arbitration clause, effective May 15, 2025. If you do not agree to the new terms, you have until that date to close your account and withdraw funds.
The arbitration agreement means that most disputes—including those about the agreement’s enforceability—will be decided by an arbitrator, not a court. This limits your ability to pursue claims in court or as part of a class action.
Critics argue that these arbitration provisions can be one-sided, as they are presented as "adhesion contracts" with little room for negotiation and may impose burdensome pre-arbitration procedures on users.
2. Veritaseum Patent Lawsuit
Veritaseum Capital LLC has sued Coinbase for alleged patent infringement, seeking at least $350 million in damages.
The patent in question (U.S. Patent No. 11,196,566) covers technology for secure, low-trust or zero-trust value transfers over blockchain, including crypto payments, trading, and staking.
Veritaseum claims Coinbase has used this technology across its platform, including in services like Coinbase Pay, Cloud, wallet, app, and website, without a license.
The lawsuit alleges that Coinbase was aware of the patent as early as July 2022 but continued to use the technology.
If Veritaseum prevails, Coinbase could face significant financial penalties and may be forced to change or restrict some of its services.
3. What This Means for Users and Shareholders
Operational Risk: If Coinbase loses the lawsuit, it could impact the availability of certain features or services, and potentially affect the company’s financial stability.
Legal Exposure: The outcome may set a precedent for other patent claims in the crypto sector, increasing legal risks for platforms and users.
User Rights: The updated arbitration agreement could limit your legal recourse in the event of disputes with Coinbase.
Action Steps:
Read the Coinbase User Agreement carefully, especially the arbitration and dispute resolution sections.
Monitor the progress of the Veritaseum lawsuit and any official communications from Coinbase regarding service changes.
Consider your risk tolerance and whether you are comfortable with the current legal and operational environment.
See @SovereignRiz article below for more insight:
https://x.com/SovereignRiz/status/1914711479279899133