Question of whether mining equipment preorders qualify as securities moved to arbitration

Quick Take

  • Roberts v. Obelisk, Inc.
  • Court granted a motion to compel arbitration, which makes it sufficiently less likely that the Court will issue a substantive ruling on the merits of plaintiff’s claims
  • Court explains that “Obelisk offered pre-orders for two types of miner, the SC1 and the DCR1. Because the miners boasted high ‘hash rates,’ individuals involved in the cryptocurrency mining industry (including the Plaintiffs) believed these units would be more profitable than existing miners.”
  • Defendant moved to dismiss the case for lack of personal jurisdiction, The Court found sufficient contacts to satisfy the well-established rubric for assertion of a court’s jurisdiction over out of state defendants

Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario and Stephen Palley. They are not legal advice. These are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.

As always, Rosario summaries are “NMR” and Palley summaries are “SDP”.

Roberts v. Obelisk, Inc., 2019 U.S. Dist. LEXIS 72065 (D.Cal., 18-cv-2898-LAB, April 29, 2019) [SDP]

Is the marketing or sale of cryptocurrency miners that ultimately fail to meet promised specifications a violation of state securities and unfair marketing laws? We may never know what this Court thinks of the subject, because it just granted a motion to compel arbitration. A discussion of the arbitration decision follows, but this ruling makes it sufficiently less likely (though not impossible) that this Court will issue a substantive ruling on the merits of plaintiff’s claims, which will be resolved in the first instance by an arbitrator, whose ruling if challenged will be accorded significant deference. While this makes it…

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