Coinbase Sued for $1 Billion Over Recent Delisting

Bit Global, the newly appointed custodian for WBTC following its partnership with Justin Sun, has filed a $1 billion lawsuit against Coinbase after the exchange announced it would delist the token.

The lawsuit claims that Coinbase’s decision was unfair and aimed at promoting its own competing product, cbBTC, instead.

Coinbase revealed on November 19, 2024, that it would remove WBTC from its platform by December 19, citing a routine review of listing policies. This move coincided with significant changes to the WBTC ecosystem, specifically the transition of custodial responsibilities from BitGo to Bit Global Trust, a Hong Kong-based firm linked to Sun’s Tron blockchain. This restructuring has raised concerns in the crypto space, particularly among decentralized finance (DeFi) platforms like MakerDAO and Aave, who have contemplated using WBTC as collateral but have not yet taken action.

Since its launch in 2019, WBTC has dominated as the largest tokenized Bitcoin with a market cap exceeding $13.4 billion, well ahead of competitors such as renBTC and iBTC. With the new governance model, BitGo remains in charge of WBTC’s operations, while BiT Global Trust now holds the Bitcoin backing the token. The control over WBTC’s collateral is divided between BitGo, BiT Global Trust, and a BiT Global subsidiary in Singapore, each holding one of the multi-signature keys.

In the lawsuit filed by law firm Kneupper & Covey on behalf of BiT Global, the firm accuses Coinbase of anti-competitive behavior and claims the exchange’s actions violate both state and federal laws, potentially harming BiT Global’s operations. Kevin Kneupper, the attorney representing Bit Global, argued that this case could set a dangerous precedent for the cryptocurrency industry. Coinbase, on the other hand, defended its position, asserting that the decision was in line with its ongoing commitment to upholding rigorous listing standards.