Coinbase has issued a response to a lawsuit filed by BiT Global, a company affiliated with Justin Sun, after the exchange announced it would delist wrapped Bitcoin (wBTC) on Dec. 19.
Coinbase has issued a response to a lawsuit filed by BiT Global, a company affiliated with Justin Sun, after the exchange announced it would delist wrapped Bitcoin (wBTC) on Dec. 19. BiT Global claims that the delisting constitutes defamation and that Coinbase seeks to monopolize the tokenized Bitcoin market.
The lawsuit arose after Coinbase raised concerns regarding the new custodianship of wBTC, which is now partially managed by BiT Global and its Singaporean subsidiary.
This shift followed BitGo's announcement in August that it would share two of the three keys necessary for wBTC operations with these entities, a move Coinbase described as increasing protocol risk.
Coinbase's Chief Legal Officer, Paul Grewal, stated on X that the company has filed a response to BiT Global's request for a temporary restraining order, asserting that the lawsuit lacks merit. Grewal emphasized the decision to delist wBTC was based on rigorous internal processes due to concerns about Sun’s involvement and allegations of past financial misconduct.
BiT Global has alleged that Coinbase's actions are anti-competitive and that the exchange engaged in "predatory practices" to promote its own wrapped Bitcoin product, cbBTC, which has a market capitalization of around $2 billion compared to wBTC’s $13.4 billion.
The lawsuit also contends that Coinbase's delisting of wBTC raises issues under federal laws designed to prevent monopolistic behavior.
In its defense, Coinbase pointed out that its platform accounted for less than 1% of wBTC transactions, arguing that this diminishes BiT Global’s damages claims.
The exchange has faced scrutiny regarding Sun's past regulatory issues, including investigations by the U.S. Securities and Exchange Commission and the FBI.
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