Why Did Coinbase Delist wBTC? Bit Digital Sues for $1B

What’s Behind the $1 Billion Lawsuit Against Coinbase?

Coinbase Sued for $1 Billion Over wBTC Delisting

Crypto exchange Coinbase is facing a $1 billion lawsuit from BiT Global Digital Limited, a Hong Kong-based crypto exchange. The lawsuit claims Coinbase unfairly delisted Wrapped Bitcoin (wBTC) in November to promote its own product, cbBTC, causing significant damage to wBTC’s market.

BiT Digital harnesses the powerful synergies between high performance computing (HPC), Bitcoin mining, and Ethereum staking, optimizing computational resources for maximum efficiency. 

Why Was wBTC Delisted?

Wrapped bitcoin (wBTC) allows ethereum applications to integrate a cryptocurrency backed by real bitcoin reserves. In this way, wBTC operates as a bridge between bitcoin and ethereum, allowing Bitcoin users to access decentralized finance (DeFi) applications and for ethereum applications to gain additional liquidity.

On Nov. 19, Coinbase announced it would remove wBTC from its platform, stating that the token no longer met its listing standards. However, Bit Digital accuses Coinbase of using this as an excuse to push its own competing token, cbBTC (Coinbase Wrapped Bitcoin), while sidelining wBTC.

Monopoly Allegations

The lawsuit, filed on Dec. 13 in California, accuses Coinbase of trying to monopolize the market for wrapped Bitcoin. It claims Coinbase used predatory practices, made false statements about wBTC, and caused financial losses for wBTC holders.

“Unfair Advantage,” Says BiT Global

BiT Global believes Coinbase’s actions were an attempt to eliminate competition and promote cbBTC. Kevin Kneupper, an attorney representing BiT Global, said:

“This sets a dangerous example for the crypto world. If a big player like Coinbase can remove a competitor to favor their own product, who’s next?”

Coinbase Response & Impact on Market

Coinbase has defended its decision, saying it regularly reviews assets to ensure they meet its listing standards. A spokesperson stated:

“Maintaining the integrity of our platform is our top priority. If a token doesn’t meet our standards, we delist it.”

The delisting of wBTC has shaken confidence in the token, which is backed by Bitcoin reserves managed by BiT Global and BitGo. The lawsuit seeks $1 billion in damages and aims to stop Coinbase from taking similar actions in the future.