Coinbase was recently sued for delisting Wrapped Bitcoin (wBTC) by BiT Global claiming the US-based exchange unfairly removed wBTC from its platform to promote own version Coinbase Wrapped (cbBTC).
However, Coinbase has prevailed in court against BiT Global, which challenged Coinbase’s decision to delist Wrapped Bitcoin (wBTC).
Wrapped Bitcoin (wBTC) is a tokenized version of Bitcoin is an Ethereum-based token. Each wBTC is pegged 1:1 to Bitcoin, enabling Bitcoin holders to access Ethereum’s decentralized finance (DeFi) ecosystem while retaining the value of their Bitcoin.
Crypto custodian, BitGo, initiated wBTC in 2019 in collaboration with several crypto firms. BitGo maintained the Bitcoin reserves backing wBTC, ensuring transparency and liquidity.
Coinbase listed Wrapped Bitcoin (wBTC) in January 2019. However, it announced in November 2024 that it would delist wBTC from its platform, citing failure to meet its rigorous listing standards. Coinbase’s Chief Legal Officer stated that the decision was part of regular reviews to maintain market integrity and user safety.
Concerns were heightened after BitGo transferred partial control of wBTC reserves to BiT Global, a firm linked to controversial crypto entrepreneur Justin Sun. This custody shift raised questions about the asset’s trustworthiness.
BiT Global alleged in a lawsuit that Coinbase’s move was strategically designed to promote its own competing token, cbBTC. cbBTC, or Coinbase Wrapped Bitcoin, is a tokenized version of Bitcoin launched by Coinbase in September 2024.
It is an ERC-20 token built on Base, representing Bitcoin at a 1:1 backing. This means every cbBTC is backed by an equivalent amount of Bitcoin held securely in custody by Coinbase.
The token aims to provide Bitcoin holders with access to Ethereum’s decentralized finance (DeFi) ecosystem while ensuring reliability and transparency, leveraging Coinbase’s reputation and custodial infrastructure. It competes directly with other wrapped Bitcoin products like wBTC.
BiT Global claimed that the delisting caused significant financial harm to the wBTC ecosystem, violating antitrust laws and undermining fair competition. It sought a court order to prevent Coinbase from proceeding with the delisting.
On December 18, 2024, the court denied BiT Global’s request for a restraining order against Coinbase. The judge concluded that BiT Global failed to provide sufficient evidence of immediate harm caused by the delisting. Coinbase was allowed to proceed with its plan to remove wBTC trading.
