cryptojournalist
The Lawsuit Explained
Coinbase is being sued for $1 billion by BiT Global Digital, which accuses the exchange of unfair practices after it delisted Wrapped Bitcoin (wBTC) in November. BiT Global claims Coinbase’s actions were intended to promote its own Bitcoin-based token, Coinbase BTC (cbBTC). The lawsuit alleges this amounts to monopolization of the wrapped Bitcoin market under U.S. antitrust laws, specifically the Sherman Act.
The complaint, filed on December 13, states Coinbase made false claims about wBTC’s compliance to damage its market standing and boost cbBTC.
Coinbase’s Defense
Paul Grewal, Coinbase’s chief legal officer, responded to the accusations, emphasizing the exchange’s commitment to maintaining high listing standards. “If an asset no longer meets our standards, we delist it. If another asset meets or exceeds those standards, we list it,” Grewal stated on X.
A Coinbase spokesperson echoed this sentiment, reaffirming that the company prioritizes integrity in its listing practices. The exchange has not disclosed specific reasons for wBTC’s delisting, which was announced on November 19.
Industry Backlash
The delisting sparked criticism within the crypto community. Tron founder Justin Sun questioned Coinbase’s transparency, sharing a screenshot of CEO Brian Armstrong’s past statement that the exchange is “asset agnostic” and supports consumer choice in the crypto economy. Critics argue this stance conflicts with Coinbase’s recent actions.
Background on cbBTC and wBTC
Coinbase first mentioned cbBTC in July, presenting it as a way to expand Bitcoin’s role in decentralized finance (DeFi), also called BTCFi. The timing of wBTC’s delisting and cbBTC’s development has raised concerns about potential conflicts of interest.
BiT Global’s attorneys claim Coinbase has added memecoins to its platform while challenging wBTC’s compliance shortly before launching a similar product. The lawsuit was filed in the U.S. District Court for the Northern District of California by the law firm Kneupper & Covey.
