Coinbase Fights Legal Battle Over Delisting of Wrapped Bitcoin (WBTC)
Coinbase is currently embroiled in a legal dispute with BiT Global over its decision to delist wrapped Bitcoin (WBTC). The exchange has pushed back against BiT Global’s attempt to halt the delisting, arguing that the lawsuit lacks merit and that a temporary restraining order (TRO) should be denied.
The decision to delist WBTC was driven by concerns about the token’s association with TRON founder Justin Sun and the lack of transparency regarding its reserves. Coinbase’s chief legal officer, Paul Grewal, described BiT’s lawsuit as “bogus” and emphasized that it lacks any semblance of merit.
In a court filing submitted to the US District Court for the Northern District of California, Coinbase detailed its extensive internal review process that led to the delisting decision. The exchange cited Sun’s history of alleged fraud and market manipulation, as well as BiT’s failure to provide transparency on its ownership structure, as key factors in its decision.
According to Coinbase, Sun’s reputation for fraud and market manipulation poses an unacceptable risk to its platform and customers. The exchange also raised concerns about BiT’s failure to address questions regarding the ultimate ownership of WBTC reserves, further exacerbating its apprehensions.
BiT Global, the plaintiff in the case, has accused Coinbase of unfairly delisting WBTC to promote its own competing asset, cbBTC. The firm alleges that the decision will result in significant reputational and financial harm, eroding consumer trust in WBTC and limiting access to critical trading platforms.
However, Coinbase refuted these claims, stating that less than 1% of global WBTC transactions occur on its platform. The exchange also pointed to declining WBTC circulation prior to the delisting announcement, attributing it to Sun’s involvement.
The case underscores the growing scrutiny over Sun’s influence in the crypto space, as he has faced lawsuits from the Securities and Exchange Commission (SEC) and is reportedly under investigation for potential criminal misconduct.
A hearing on BiT’s TRO request is scheduled for Dec. 18, with the potential to temporarily delay Coinbase’s delisting of WBTC on Dec. 19. Despite the legal battle, wBTC holders still have multiple avenues to trade the token on other platforms and can store or transfer their holdings using Coinbase Wallet, a separate decentralized application.