BiT Global has recently taken legal action against Coinbase, the largest cryptocurrency trading platform in the United States. In a court filing dated December 13, the Justin Sun-linked crypto custodian alleged that Coinbase unfairly removed wrapped Bitcoin (WBTC) from its platform in favor of its in-house product, Coinbase Wrapped Bitcoin (cbBTC).
The lawsuit filed by BiT Global accuses Coinbase of leveraging its dominant position in the crypto market to stifle competition, thereby violating antitrust laws. The complaint suggests that Coinbase’s decision to replace WBTC with cbBTC is a strategic move aimed at gaining control over the wrapped Bitcoin market and increasing transaction revenues through higher fees associated with cbBTC transactions.
According to the court filing, Coinbase’s justification for delisting WBTC based on “listing standards” is called into question by its recent inclusion of meme coins like PEPE and MOG on its platform. BiT Global argues that this demonstrates Coinbase’s true intention of eliminating competition and capturing WBTC’s market share for itself.
The lawsuit seeks to restore competition in the wrapped Bitcoin market and prevent further centralization of power. BiT Global aims to reverse the delisting of WBTC and protect decentralized innovation within the crypto space.
Coinbase’s decision to delist WBTC comes amidst a turbulent year for the asset, with BiT Global emerging as a key custodian for WBTC following BitGo’s decision to distribute custody control to multiple entities. Concerns within the DeFi community regarding Justin Sun’s connection to BiT Global prompted some protocols like MakerDAO and Aave to reconsider WBTC as a collateral asset.
Despite these challenges, several firms including Coinbase have introduced their own wrapped Bitcoin products. Coinbase’s cbBTC has quickly gained momentum to become the second-largest wrapped Bitcoin product after WBTC, with a market capitalization of approximately $2 billion. On the other hand, WBTC, with a market cap of $13.7 billion, has experienced a reduction in token supply due to ongoing difficulties.
The developments in the wrapped Bitcoin market highlight the competition and innovation taking place within the crypto space, as different entities vie for market share and dominance. As the legal battle between BiT Global and Coinbase unfolds, the future of wrapped Bitcoin and decentralized finance remains uncertain.