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Coinbase refutes ‘baseless’ BiT Global wBTC suit
No law compels Coinbase to “compromise the integrity of its platform” by doing business with Justin Sun-tied BiT Global, the U.S. crypto exchange wrote.
Coinbase asked a U.S. court to deny BiT Global’s lawsuit in Northern California, which seeks $1 billion in relief and a temporary restraining order on wrapped Bitcoin’s (wBTC)’s delisting.
The Justin Sun-affiliated BiT Global sued Coinbase on Dec. 13 for planning to remove the wrapped Bitcoin (BTC) asset from its U.S.-based exchange. BiT Global claimed delisting wBTC was illegal, would cause irreparable harm to the token’s economics, and was unjustified as Coinbase listed unserious cryptocurrencies like meme coins.
Also, launching cbBTC breached antitrust laws and threatened to create a Coinbase-controlled monopoly in the tokenized Bitcoin marketplace.
The crypto exchange argued that California’s Unfair Competition Law was inapplicable. DefiLlama confirmed that cbBTC ranked outside the top 10 tokenized BTC assets by market capitalization.
Coinbase has the right to choose whom to do business with, and no law requires it to allow bad actors or suspected bad actors onto its exchange… Coinbase does not have anything approaching monopoly power, and because its decision to delist wBTC was proper and justified based on the careful review it undertook and the unacceptable risk of doing business with an entity associated with Mr. Sun.
Coinbase response to BiT Global lawsuit
According to the December 17 court filing, material changes to wBTC’s stewardship, particularly Justin Sun’s majority control of the Bitcoin reserves, prompted Coinbase and other entities to reconsider their support for the asset.
The Securities and Exchange Commission charged Sun and three of his wholly owned companies with federal violations. Additionally, the FBI reportedly opened an inquiry regarding potential terror financing involving Sun.
The U.S. Department of Justice has not indicted Sun by publishing time, neither have authorities issued any arrest warrants for the Tron (TRX) founder.
Coinbase stated that its new wBTC risk assessments, in line with company listing standards, raised red flags, primarily due to Sun’s involvement. The exchange described its decision as “common sense” and necessary to protect its customers. The company also emphasized that delisting wBTC would not impact the token’s overall on-chain activity, which largely takes place on other platforms.
Nor can BiT claim harm, let alone irreparable harm, from being delisted from an exchange where less than 1% of transactions involving wBTC are made. Perhaps that is why BiT sat on its claims for nearly a month before filing suit, belying any urgency for relief.
The U.S. crypto titan asked the California Court to rule against BiT Global’s TRO request and $1 billion relief package, due to the firm’s ties to an allegedly indictable individual and fabricated emergency regarding wBTC.
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Tron founder Justin Sun has recently confronted Coinbase CLO Paul Grewal in a discussion over the delisting of wBTC from crypto exchange Coinbase. The news caught fire when Justin Sun’s BiT Global, which recently took a major stake in the wBTC ecosystem, slapped a lawsuit on Coinbase for the delisting of wrapped Bitcoin.
Justin Sun Questions Coinbase on wBTC Delisting
Justin Sun’s BiT Global will be suing crypto exchange Coinbase, which decided to delist wrapped Bitcoin (wBTC), and instead launched a competing product cBTC back in September. On November 19, Coinbase announced plans to delist Wrapped Bitcoin (WBTC) starting December 19, 2024, citing a periodic review of its listing standards.
However, delisting the largest tokenized version of Bitcoin i.e. wBTC has grabbed the attention. Earlier this year, BiT Global Trust took custodial rights for WBTC. Now it alleges that Coinbase isn’t following its “fair” listing standard and is removing wBTC to weed out competition for its newly launch cBTC.
Law firm Kneupper & Covey, representing BiT Global, has filed a lawsuit alleging that Coinbase’s decision to delist Wrapped Bitcoin (WBTC) is anti-competitive and violates multiple state and federal laws. The suit claims the delisting will cause significant harm to BiT Global, which recently assumed custodial responsibilities for WBTC under a new arrangement. In a statement on Friday, attorney Kevin Kneupper said:
“We believe this decision sets a terrible precedent for everyone in the cryptocurrency space. If an exchange of Coinbase’s size can delist a cryptocurrency just as it plans to launch its own competing product, who’s safe? And who’s next?”
However, Coinbase CLO Paul Grewal has justified the exchange’s actions noting: “When an asset no longer meets our listing standards, we will drop it. When another asset can meet or exceed market requirements without sacrificing those standards, we will list it. Thank you Bit Global for the chance to show this to a US federal court and on the entire global crypto stage”.
Responding to this, Justin Sun pointed out an earlier statement by Armstrong back from 2021, wherein he stated: “Outside of our listing standards, we do not offer an opinion on the value of each asset. We are asset agnostic because we believe in free markets”. Sun told Grewal that his views don’t match that of Coinbase founder’s.
Listing “Valueless” Meme Coins?
The law firm representing BiT Global stated that Coinbase has recently listed several “fundamentally valueless” memecoins, yet has now deemed Wrapped Bitcoin (WBTC) as failing to meet its standards. The recent one includes the listing of Peanut the Squirrel (PNUT). It added:
“Once the value in wBTC had been demonstrated, Coinbase changed the rules, delisting wBTC from its platform so that it could no longer be traded on the Coinbase platform—and it did so shortly after launching its own knock-off clone called cbBTC”.
In September 2024, Coinbase introduced cbBTC on Ethereum and its Layer 2 network, Base. Since its launch, cbBTC has become the second-largest tokenized version of Bitcoin, boasting a market capitalization of just over $2 billion.
Bhushan Akolkar
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The lawsuit filed against Coinbase Global Inc. by Bit Global is drawing intense debate on social media platform X. In a recent post, Coinbase CLO Paul Grewal responded to Tron Founder Justin Sun’s comment on the exchange’s listing standards.
Notably, the discussions stem from the exchange delisting the wBTC token from its platform, which has sparked discussions in the market. Besides, Bit Global, backed by Justin Sun, has sued the leading exchange for delisting the token from its platform recently.
Coinbase CLO Reaffirms Exchange’s Listing Standards
The controversy erupted after Coinbase announced it would delist wBTC on December 19, 2024, following a review of its listing standards. Paul Grewal, Chief Legal Officer (CLO) of the crypto exchange, addressed the matter in a recent social media post, stating, “When an asset no longer meets our listing standards, we will drop it. When another asset can meet or exceed market requirements without sacrificing those standards, we will list it.” Grewal also expressed confidence in defending the exchange’s position in a U.S. federal court, stating:
“Thank you Bit Global for the chance to show this to a US federal court and on the entire global crypto stage.”
BiT Global, backed by Tron Founder Justin Sun, has recently sued the crypto exchange for delisting the token. Besides, the firm, BiT Global, has also acquired a key stake in the wBTC ecosystem. The delisting decision has raised questions, especially after BitGo, the wBTC custodian, announced a new custody structure involving BiT Global.
Critics, including major DeFi players like MakerDAO and Aave, voiced skepticism about this partnership, though wBTC remains part of their platforms. Meanwhile, Justin Sun challenged Grewal’s remarks, sharing a screenshot of Coinbase CEO Brian Armstrong’s earlier statement that emphasized listing “every asset where it is legal to do so.”
This is where BiT Global found a caveat as it claimed the exchange lists memecoins like PEPE with no intrinsic market value
In response, Grewal pointed out that safety and legality are central to the leading crypto exchange’s listing decisions. He added a sharp rebuttal to Sun, saying he looked forward to his deposition under oath in California.
wBTC Price Soars Amid Listing Debate
The Coinbase-wBTC dispute underscores the broader challenges crypto platforms face in balancing innovation with due diligence. For the exchange, the focus remains on ensuring only safe and compliant assets make it to its platform. Coinbase CLO Paul Grewal reinforced this point in his recent X post.
Notably, Justin Sun’s criticism also drew attention to his role in the wBTC ecosystem. The partnership between BitGo, BiT Global, and the Tron ecosystem has faced skepticism within the crypto community. The exchange’s decision to delist wBTC may reflect these concerns.
However, despite the news, wBTC price today noted a surge of 0.64% and exchanged hands at $101,607 as Bitcoin soars. Its trading volume fell 5% to $353 million, while the token saw a 24-hour high of $101,772.65.
Rupam Roy
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Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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American crypto trading firm Coinbase Global Inc. has scored another major win against the Federal Deposit Insurance Commission (FDIC) in its ongoing Freedom of Information Act (FOIA) legal battle. This new ruling flags the FDIC for making what the court called “nuanced redactions.”
Coinbase and FDIC: Where is The Case Heading?
According to excepts of the ruling shared by Paul Grewal, the exchange’s Chief Legal Officer, the Judge said FDIC acted in bad faith with its redactions. The judge noted that the market regulator cannot just “blanket redact everything that is not a preposition.”
JUST IN: Judge Reyes ruled that FDIC didn’t do what it was ordered to do. “The Court is concerned with what appears to be FDICs lack of good-faith effort in making nuanced redactions. Defendant cannot simply blanket redact everything that is not an article or preposition.” 1/3 https://t.co/AX5HCKjrij
— paulgrewal.eth (@iampaulgrewal) December 12, 2024
This new ruling comes as Coinbase shared documents last week that exposed the FDIC’s role in the much criticized Operation Chokepoint 2.0.
This is a developing story, please check back for updates!!!
Godfrey Benjamin
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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