Coinbase refutes ‘baseless’ BiT Global wBTC suit
No law compels Coinbase to “compromise the integrity of its platform” by doing business with Justin Sun-tied BiT Global, the U.S. crypto exchange wrote.
Coinbase asked a U.S. court to deny BiT Global’s lawsuit in Northern California, which seeks $1 billion in relief and a temporary restraining order on wrapped Bitcoin’s (wBTC)’s delisting.
The Justin Sun-affiliated BiT Global sued Coinbase on Dec. 13 for planning to remove the wrapped Bitcoin (BTC) asset from its U.S.-based exchange. BiT Global claimed delisting wBTC was illegal, would cause irreparable harm to the token’s economics, and was unjustified as Coinbase listed unserious cryptocurrencies like meme coins.
Also, launching cbBTC breached antitrust laws and threatened to create a Coinbase-controlled monopoly in the tokenized Bitcoin marketplace.
The crypto exchange argued that California’s Unfair Competition Law was inapplicable. DefiLlama confirmed that cbBTC ranked outside the top 10 tokenized BTC assets by market capitalization.
Coinbase has the right to choose whom to do business with, and no law requires it to allow bad actors or suspected bad actors onto its exchange… Coinbase does not have anything approaching monopoly power, and because its decision to delist wBTC was proper and justified based on the careful review it undertook and the unacceptable risk of doing business with an entity associated with Mr. Sun.
Coinbase response to BiT Global lawsuit
According to the December 17 court filing, material changes to wBTC’s stewardship, particularly Justin Sun’s majority control of the Bitcoin reserves, prompted Coinbase and other entities to reconsider their support for the asset.
The Securities and Exchange Commission charged Sun and three of his wholly owned companies with federal violations. Additionally, the FBI reportedly opened an inquiry regarding potential terror financing involving Sun.
The U.S. Department of Justice has not indicted Sun by publishing time, neither have authorities issued any arrest warrants for the Tron (TRX) founder.
Coinbase stated that its new wBTC risk assessments, in line with company listing standards, raised red flags, primarily due to Sun’s involvement. The exchange described its decision as “common sense” and necessary to protect its customers. The company also emphasized that delisting wBTC would not impact the token’s overall on-chain activity, which largely takes place on other platforms.
Nor can BiT claim harm, let alone irreparable harm, from being delisted from an exchange where less than 1% of transactions involving wBTC are made. Perhaps that is why BiT sat on its claims for nearly a month before filing suit, belying any urgency for relief.
The U.S. crypto titan asked the California Court to rule against BiT Global’s TRO request and $1 billion relief package, due to the firm’s ties to an allegedly indictable individual and fabricated emergency regarding wBTC.