(Photo: Konskie, Poland)

Lawyers for Coinbase are set to ask a federal judge in San Francisco on Thursday to toss a class action lawsuit alleging the company botched the launch of bitcoin cash (BCH) transactions on its cryptocurrency exchange in a way that enabled company insiders to profit at the expense of customers.

Coinbase's lawyers at Keker, Van Nest & Peters attorneys claim Coinbase insiders by necessity had to be informed about the launch of BCH on its platform and that all of its employees were explicitly barred from trading based on inside information.

“Plaintiff may have buyer's remorse, but, as a matter of law, he cannot place his purported losses at Defendants' feet. His Amended Complaint should be dismissed with prejudice” the Keker lawyer wrote in the motion to dismiss.

Lawyers for the plaintiff at Green & Noblin and The Grant Law Firm, in turn, claim that the defense motion “cherry pick[s] isolated half-statements from the Amended Complaint that do not fairly describe” the company's misleading statements regarding the BCH launch.

“The harm to the victims here is apparent—purchases at inflated prices, the payment of fees to Coinbase for BCH at inflated prices, and the inability to recover either the coin or monies of sellers for days preventing them from being able to trade on another exchange,” the plaintiffs lawyers wrote. “The motive for Coinbase is equally obvious—to enable insiders—its better employees, to trade BCH at inflated prices, and then to shut down the exchange before Coinbase experienced a run so that it could avoid payments to sellers at the inflated prices,” they wrote.

Judge Vince Chhabria of the U.S. District Court for the Northern District of California, who is overseeing the suit, may not get to weigh in on the merits of the case. Coinbase's lawyers argue that the plaintiff waived the right to participate in a lawsuit or class arbitration after signing an agreement stipulating that disputes be handled by a company support team or “arbitration on an individual basis.”

But lawyers for the plaintiff, Jeffrey Berk, an Arizona man who claims he paid twice the price for BCH that he initially submitted to Coinbase, argue the suit should stay with Chhabria. They claim not only is there “a strong and long-standing presumption that courts, not arbitrators, determine the threshold questions of arbitrability,” but that Coinbase's incorporating AAA rules into its user agreement leaves questions over its enforceability and validity to a court.

“There is no question that the Arbitration Agreement here is one of adhesion and oppression was extant,” they wrote. “Neither Plaintiff nor any other Class member had an opportunity to negotiate it or to opt out. Moreover, no other exchanges had close to the liquidity that Coinbase has, as the largest cryptocurrency exchange in the world.”

Further, plaintiff claims that Coinbase's “insider trading and tipping,” “failure to monitor employees” and “misleading statements” around the BCH launch bring the dispute outside the scope of arbitration.