Coinbase faces $1b lawsuit over WBTC delisting, accused of promoting cbBTC
Coinbase faces $1b lawsuit over WBTC delisting, accused of promoting cbBTC
Coinbase is under legal fire from Hong Kong-based crypto exchange BiT Global Digital Limited, which has filed a $1 billion lawsuit accusing the U.S.-based exchange of unfair practices surrounding its November delisting of wrapped Bitcoin (wBTC).
BiT Global claims the delisting was part of an effort to promote Coinbase’s own wrapped Bitcoin product, cbBTC, undermining wBTC’s market position and causing significant financial losses.
Filed on Dec. 13 in the Northern District of California by Kneupper & Covey, the lawsuit alleges that Coinbase violated the Sherman Act by attempting to monopolize the wrapped Bitcoin market. The suit also accuses Coinbase of predatory practices and spreading false statements about wBTC’s compliance with listing standards.
BiT Global, which jointly custodies wBTC’s Bitcoin reserves alongside BitGo, described Coinbase’s actions as an aggressive move to gain a competitive advantage. The delisting decision, announced on Nov. 19, cited undisclosed failures by wBTC to meet Coinbase’s listing standards. Trading for wBTC is scheduled to cease on Dec. 19, 2024.
Impact on market confidence and industry concerns
BiT Global’s attorneys argue that Coinbase’s actions have damaged consumer confidence in wBTC and set a troubling precedent for the cryptocurrency industry. “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?” said Kevin Kneupper, BiT Global’s legal counsel.
The lawsuit seeks over $1 billion in damages and an injunction to prevent further harm. BiT Global asserts that the move to promote cbBTC at wBTC’s expense reflects monopolistic intent. Coinbase has not yet responded to the lawsuit but previously stated that the decision was based on a routine review of listing standards.
The outcome of this case could have far-reaching implications for how exchanges manage token listings and competition in the cryptocurrency market. Industry participants are watching closely as the legal battle unfolds, with potential impacts on investor confidence and regulatory scrutiny in the crypto space.
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