Coinbase Pushes Back Against Justin Sun-Backed BiT Global’s Lawsuit Over wBTC Delisting

Key Takeaways

• Coinbase filed a response to the $1 billion lawsuit filed by BiT Global over wBTC delisting.
• The exchange cited centralization risks and Justin Sun’s involvement as reasons for the delisting.
• BiT Global sought an emergency override of Coinbase’s delisting decision, calling it anti-competitive.

Coinbase’s decision to delist the wrapped Bitcoin (wBTC) token has sparked a heated legal battle.

BiT Global, affiliated with the token’s creation, filed a $1 billion lawsuit, alleging the delisting was unfair and violated federal and state laws. Now, Coinbase has responded , urging the court to dismiss what it calls baseless claims.

In its defense, Coinbase emphasized the rigorous internal review process that led to the delisting, which it attributes to centralization risks and concerns tied to Tron founder Justin Sun’s involvement.

Centralization Concerns: Coinbase’s Case Against wBTC

Coinbase’s legal response justified reasons for delisting wBTC, a tokenized version of Bitcoin issued on the Ethereum blockchain.

The exchange raised alarms over BitGo’s plans to collaborate with BiT Global, an entity partially owned by Sun. Coinbase argues that Sun’s operational role introduced unacceptable risks to the project.

“BiT seeks to force Coinbase to do business with an entity that no longer complies with our standards due to Mr. Sun’s material involvement,” the company stated.

Coinbase highlighted Sun’s history of alleged fraud and market manipulation, which it claims makes the asset incompatible with its compliance protocols.

BitGo CEO Mike Belshe countered Coinbase’s concerns, asserting that Sun has no access to custodial asset keys and dismissing allegations of centralization risks.

wBTC, the 18th-largest cryptocurrency by market capitalization according to CoinGecko, serves as a bridge for traders to access Bitcoin holdings on non-Bitcoin-native platforms and apps.

Despite its popularity, Coinbase maintains that no legal framework compels it to list an asset tied to figures with a contentious history.

BiT Global’s Allegations and Emergency Request

Coinbase’s filing comes in response to BiT Global’s Dec. 13 lawsuit. 

The Justin Sun-backed company accused Coinbase of anti-competitive behavior under the Sherman Act, alleging the delisting aimed to promote Coinbase’s competing product, Coinbase Wrapped Bitcoin (cbBTC), launched earlier this year.

BiT Global requested an emergency injunction to override the delisting, claiming that Coinbase’s actions were an intentional attempt to monopolize the market.

The company argued that Coinbase’s motives were purely self-serving and aimed at securing dominance for cbBTC.

The lawsuit is the latest flashpoint in the fraught relationship between Coinbase and Sun.

Sun has previously accused Coinbase of charging exorbitant fees for token listings, while Coinbase’s latest actions suggest a broader effort to distance itself from Sun-affiliated projects.