Coefficient Group Holding Limited v. Solana Labs CA1/1
Opinion
Opinion
I.
BACKGROUND
Coefficient is an investment firm, and Solana is a cryptocurrency business. In June 2018, Coefficient invested in Solana by transferring to it Ethereum tokens, a type of cryptocurrency, that had an understood market value of $1,025,000. As part of the transaction, the parties executed two materially identical written investment agreements. In them, Solana disclosed it was a Cayman Islands entity. The agreements included a section on arbitration, Section 7, which applied only to “individuals located, resident or domiciled” in the United States.” (Capitalization omitted.) Shortly after the investment transaction, the parties agreed to rescind the deal. A dispute soon arose, however, because the value of the Ethereum tokens had dropped, and Solana did not refund to Coefficient the full value that the tokens had at the time of the original investment. Coefficient initiated this action by filing a complaint, and Solana responded by filing a motion to compel arbitration under Section 7 of the investment agreements. The trial court denied the motion on the ground that “the parties never entered into an arbitration agreement.”