- BiT Global filed a lawsuit against Coinbase last week, claiming the exchange defamed the Justin Sun-affiliated company and attempted to control the tokenized bitcoin market by delisting wBTC. Coinbase reacted to the case.
- Coinbase claimed that BitGo’s announcement in August that BiT Gl0bal will take over as the custodian for the biggest tokenized bitcoin product increased protocol risk.
- Since then, Coinbase has introduced cbBTC, a competing wrap version of bitcoin.
BiT Global, which is linked with Justin Sun, filed a lawsuit seeking an emergency injunction to retain wBTC, the first and largest tokenized bitcoin product, on the biggest cryptocurrency exchange in the United States. Coinbase has responded to the case.
Before we find out or even formally address BiT Global’s false allegations, we have submitted our response to their attempt to prevent us from delisting wBTC. We explain why their request for a [temporary restraining order] should be rejected and why this litigation has no merit at all.
The change coincides with a time of transition for wBTC, which is no longer exclusively managed by BitGo, its original custodian, but is now also partially maintained by BiT Global and its Singaporean subsidiary. In an effort to strengthen the protocol’s resilience, BitGo revealed in August that it was sharing two of the three wBTC keys with those two organizations.
Several participants in the cryptocurrency sector responded by expressing worries about TRON founder Justin Sun’s role in the protocol, pointing to prior regulatory incidents and fraud and market manipulation probes.
Following a regular assessment of its “listing standards,” Coinbase declared in November that it will delist wBTC on December 19 in response to these concerns. In response, BiT Global filed a lawsuit against the exchange, claiming that the ruling was anti-competitive.
The new wBTC custodian specifically claimed that Coinbase propagated false information and “fear, uncertainty, and doubt” regarding the regulatory standing and stability of wBTC as part of predatory tactics to promote a competing tokenized bitcoin product, cbBTC.
With a market valuation of more than $13.4 billion as of right now, WBTC is a token that lets users add BTC liquidity to dapp-friendly blockchains like Ethereum. In contrast, the market value of Coinbase’s cbBTC token is approximately $2 billion.
Unacceptable risk
After a thorough internal procedure, Coinbase decided that wBTC should be removed from its exchange because of the intolerable danger that Justin Sun might gain control of it.
The exchange further stated that Sun is allegedly being investigated by the FBI and the U.S. The U.S. Securities and Exchange Commission has filed a lawsuit against the Southern District of New York Attorney’s Office for “potential criminal wrongdoing” and for market manipulation and fraud. Due to violations of its terms of service, Coinbase canceled a number of accounts belonging to Sun-affiliated organizations last year.
Due to Mr. Sun’s content, BiT seeks to force Coinbase to collaborate with a business that no longer satisfies Coinbase’s requirements. However, BiT’s Complaint and TRO request noticeably omits Mr. Sun’s name and relationship to wBTC.
BiT Global said that by attempting to control the wrapped bitcoin market, Coinbase had broken a number of federal and state statutes, including as the Sherman Act and the Lanham Act, which forbid unfair monopolies and encourage competition. Additionally, it claimed that by deleting wBTC while listing memecoins like MOG, PEPE, and WIF, Coinbase had committed “trade libel.”
Coinbase argued in its filing that BiT Global’s damages claims were understated because its platform represented for less than 1% of wBTC transactions.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
