BiT Global sues Coinbase for $1b over WBTC delisting

BiT Global, backed by Justin Sun, sued cryptocurrency exchange Coinbase for unfairly delisting WBTC in order to improve a competing Bitcoin product.

BiT Global spear a billion-dollar lawsuit against Coinbase, alleging that the US crypto exchange illegally replaced its Wrapped Bitcoin (WBTC) produced with a “counterfeit” cbBTC token.

Wrapped Bitcoin was the first tokenized Bitcoin (BTC) crypto asset, allowing users to trade BTC on networks like Ethereum. BitGo initially oversaw custody of WBTC since its launch in January 2019. However, BitGo announced a deal in August 2020 to share operations between three companies, including Sun’s BiT Global.

The new deal, which was the subject of intense criticism from the community, named Hong Kong-based BiT Global as the primary custodian of WBTC. Several protocols, like Aave and Sky, considered removing the token as a collateral option, but refrained from taking action.

Coinbase said it would write off WBTC went into effect on December 19, 2024, due to listing standards, crypto.news reported in late November. This happened after Coinbase unveiled its cbBTC token on its Base and Ethereum layer network on September 12, initially. teasing the token following the ongoing WBTC controversy.

Legal consultants Kneupper & Covey, BiT Global’s attorneys, alleged that Coinbase’s WBTC delisting violated anticompetitive policies and federal rules.

We believe this decision sets a terrible precedent for everyone in the cryptocurrency industry. If an exchange the size of Coinbase can delist a cryptocurrency just as it’s considering launching its own competing product, who’s safe? And who is next?

Kevin Kneupper of Kneupper & Covey

According to the lawsuit, Coinbase citing listing standards was also an improper reason for the decision. Filings in the Northern District of California cite Coinbase listing “fundamentally worthless” memecoins like Pepe (PEPE). BiT Global is seeking damages in excess of $1 billion, as well as an injunction against Coinbase.

Meanwhile, WBTC remains the undisputed tokenized Bitcoin asset with a market size of $13.7 billion, more than its $8 billion valuation when the debacle began in the middle of Q2 2024.