KeyTakeaways:
- BiT Global sues Coinbase for delisting WBTC to promote cbBTC and dominate the market.
- Coinbase’s delisting of WBTC leads to a 5% drop in circulation, fueling legal concerns.
- BiT Global accuses Coinbase of predatory tactics and unfair business practices.
BiT Global has taken legal action against Coinbase, accusing the San Francisco-based exchange of unfairly planning to delist Wrapped Bitcoin (WBTC) in favor of its version of the token, Coinbase Wrapped BTC (cbBTC).
The lawsuit, filed on Friday, claims that Coinbase’s move to remove WBTC from its platform, scheduled for Dec 19, constitutes an unfair business practice and violates federal and state laws.
However, the crypto custodian BiT Global argues that Coinbase’s decision to delist WBTC is a predatory tactic to monopolize the wrapped Bitcoin market. WBTC, the 18th largest cryptocurrency by market capitalization, is backed 1:1 with Bitcoin and runs on the Ethereum blockchain, allowing traders to use Bitcoin across platforms that do not natively support the asset.
According to BiT Global, Coinbase’s move to remove WBTC in favor of cbBTC is part of a broader strategy to promote its product and squeeze out competition.
The lawsuit accuses Coinbase of engaging in tactics typically used by centralized tech giants to eliminate competitors, describing the exchange’s behavior as a “cash grab” masked as a commitment to decentralization.
In particular, BiT Global points to Coinbase’s listing of meme coins and tokens, such as Dogwifhat (WIF), Pepe (PEPE), and Mog Coin (MOG), as evidence of the exchange’s prioritization of profitability over genuine innovation or value.
Decline in WBTC Circulation Following Delisting
BiT Global also highlights the apparent decline in WBTC circulation after Coinbase announced its delisting. The custodian reports a 5% drop in circulation over two weeks, suggesting that Coinbase’s actions have directly impacted the WBTC market.
Background on WBTC and Coinbase’s Involvement
WBTC is an essential component of decentralized finance (DeFi) because it allows Bitcoin holders to interact with Ethereum-based applications despite Bitcoin and Ethereum being incompatible on a technical level.
Coinbase launched cbBTC in September, positioning it as an alternative to WBTC. Following the launch, the exchange delisted WBTC in November, citing the token’s failure to meet its listing standards, leading to a legal dispute.
BiT Global’s lawsuit also highlights the controversial partnership between BiT Global and BitGo, the custodian behind WBTC. Some members of the DeFi community raised concerns about Justin Sun, the founder of the Tron network, ‘s involvement with BiT Global, suggesting that it introduced risks due to his influence.
