Justin Sun-Backed BiT Global Sues Coinbase Over Unfair Delisting of WBTC

BiT Global, backed by Justin Sun, has filed a $1 billion lawsuit against crypto exchange Coinbase, alleging that the US-based exchange unfairly delisted Wrapped Bitcoin (WBTC) in favor of its competing Bitcoin product, cbBTC token.

Background of the Dispute

Wrapped Bitcoin, the first tokenized Bitcoin asset in the crypto space, allowed users to trade BTC on networks like Ethereum. Initially, BitGo oversaw custody for WBTC since its launch in January 2019. However, in August 2020, BitGo announced a deal to share operations among three companies, including Sun’s BiT Global. This new deal assigned BiT Global as the primary WBTC custodian, sparking intense community criticism.

Several protocols, such as Aave and Sky, considered removing WBTC as a collateral option but refrained from taking action. Coinbase announced that it would delist WBTC effective December 19, 2024, citing listing standards. This decision came after Coinbase unveiled its cbBTC token on its layer-network Base and Ethereum in September.

Allegations of Anti-Compete Policies and Federal Rule Violations

BiT Global’s attorneys, Kneupper & Covey, alleged that Coinbase’s WBTC delisting violated anti-compete policies and federal rules. Kevin Kneupper of Kneupper & Covey stated,

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?

The lawsuit also claims that Coinbase’s reason for delisting WBTC, citing listing standards, was inadequate. Documents filed in the Northern District of California pointed out that Coinbase listed “fundamentally valueless” memecoins like Pepe (PEPE).

Seeking Damages and Injunctive Relief

BiT Global is seeking damages in excess of $1 billion, as well as an injunctive relief against Coinbase. Despite the controversy, WBTC remains the undisputed tokenized Bitcoin asset with a $13.7 billion market capitalization, surpassing its $8 billion valuation when the debacle began in mid-Q2 2024.

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