Coinbase wrapped bitcoin cbBTC went live months ago, and in November, the US-based exchange announced plans to delist wrapped bitcoin wBTC in December across all of its platforms. But this report doesn’t seem to go well with some.
On December 13, 2024, BiT Global, a cryptocurrency company, filed a $1 billion lawsuit against Coinbase. The lawsuit claims Coinbase unfairly removed wrapped Bitcoin (wBTC) from its platform to promote its own version, Coinbase Wrapped BTC (cbBTC).
Coinbase announced in November that it would stop supporting wBTC on December 19, citing that it no longer met their listing standards. However, BiT Global disagrees, saying Coinbase’s actions were meant to remove competition for cbBTC, which has been gaining popularity since its release in September.
BiT Global also criticized Coinbase for allowing other coins with fewer credentials, like meme tokens PEPE and WIF, while claiming wBTC failed to meet standards. This move, they argue, breaks antitrust laws and harms fair competition.
Wrapped Bitcoin (wBTC) was launched in January 2019 as a collaborative project by BitGo, Kyber Network, and Ren Protocol. It was created to integrate Bitcoin into the Ethereum blockchain ecosystem. This token allows Bitcoin holders to participate in decentralized finance (DeFi) applications on Ethereum, such as lending, borrowing, and trading.
The process of creating wBTC involves locking actual Bitcoin in a secure custodial service, initially managed by BitGo. For every Bitcoin held in custody, an equivalent amount of wBTC is issued as an ERC-20 token on the Ethereum blockchain.
This token can be “unwrapped” to redeem the original Bitcoin when needed. The initiative aimed to bridge Bitcoin’s value and Ethereum’s functionality.
The promise of backing wBTC with Bitcoin on a 1:1 basis and ensuring transparency in the minting and burning process made the project gain trust. However, its centralized custodial structure has occasionally been criticized by advocates of decentralized systems.
Despite this, wBTC has become one of the most widely used tokens in DeFi applications. This reflects its success in connecting Bitcoin to Ethereum’s growing financial ecosystem.
With the success of wBTC, the acceptance of Coinbase, and it’s delisting by Coinbase, BiT Global calls for over $1 billion in damages and legal action to stop further harm. Many in the crypto community see this as part of Coinbase’s broader strategy to dominate the market.
