- Coinbase is being sued by Justin Sun’s BiT Global for delisting wBTC and releasing a rival product.
- BiT Global and a BiT Global subsidiary were designated as major wBTC protocol maintainers by BitGo in August.
The cryptocurrency exchange giant Coinbase, which last month chose to delist the asset and introduce a rival offering, is being sued by Justin Sun’s BiT Global, a company that recently emerged as a significant player in the wrapped bitcoin (wBTC) ecosystem.
Citing a recurring evaluation of its “listing standards,” Coinbase declared on November 19 that it would delist beginning on December 19, 2024. The action was taken months after BitGo, the main custodian of wBTC since its January 2019 inception, said that it would assign custody of the project to three organizations, including Sun-affiliated Hong Kong-based trust firm BiT Global.
Many in the cryptocurrency world were skeptical of the alleged strategic alliance between BitGo, Justin Sun, and the Tron ecosystem. For example, MakerDAO and Aave, two significant DeFi projects, started investigating the possibility of eliminating wBTC as a collateral asset but eventually decided against it.
The first and biggest tokenized form of cryptocurrency that trades on Ethereum and other blockchains is called WBTC. According to CoinGecko, its current market capitalization of approximately $13.4 billion makes it significantly larger than alternative onchain representations of bitcoin, such as renBTC, 21.co’s wrapped bitcoin, and iBTC.
BiT Global Trust will serve as the custodian of the underlying wBTC collateral, while BitGo will oversee and run the wBTC business under the new agreement. For the three wBTC multisig keys, BitGo, BiT Global, and a BiT Global affiliate in Singapore would each possess one.
Anti-competitive
Kneupper & Covey, the law firm that filed the lawsuit on behalf of BiT Global, asserted that Coinbase’s decision to move forward with the wBTC delisting is anti-competitive and in violation of “numerous state and federal laws.” BiT Global will also be “damaged” by the delisting.
We think that everyone involved in the bitcoin industry will suffer as a result of this move. Who is secure if a cryptocurrency may be delisted by an exchange the size of Coinbase right before it launches a rival product? Who will be the next?
Coinbase is dedicated to upholding the strict integrity of our listing requirements, and we conduct frequent assessments of the assets that are listed on our platform. An asset is delisted if it doesn’t match those requirements.
The law firm pointed out that Coinbase has listed other memecoins that are essentially worthless in recent weeks, and even though these coins satisfy its requirements, Coinbase has abruptly asserted that wBTC does not.
Shortly after introducing its own knockoff clone, cbBTC, Coinbase modified the regulations and delisted wBTC from its platform, making it impossible to trade on the Coinbase platform once the value in wBTC was proven.
In September 2024, Coinbase introduced cbBTC on Ethereum and its L2 network Base. With a market value of little more than $2 billion, it is now the second-largest tokenized form of bitcoin.
Since BitGo’s introduction in August, when its market value was approximately $8 billion, wBTC’s market capitalization has increased dramatically, despite criticism of Sun’s increasing engagement in the project.
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.
