Coinbase Rejects $1B Lawsuit Over wBTC Delisting, Says Risk Tied to Justin Sun

Coinbase, the cryptocurrency exchange platform, has rejected a lawsuit filed by Bit Global, the firm linked to TRON Founder Justin Sun, after the crypto exchange moved to delist wrapped Bitcoin (wBTC) from its platform.

BiT Global filed a lawsuit against Coinbase on December 13, alleging that the cryptocurrency exchange’s decision to delist wBTC was unlawful. The lawsuit argued that the removal of wBTC would cause significant damage to the token’s economic stability and claimed the decision was unwarranted, especially since Coinbase continues to list less serious assets like meme coins.

The lawsuit further alleged that the introduction of cbBTC violated antitrust regulations, raising concerns that it could establish a Coinbase-dominated monopoly in the market for tokenized Bitcoin assets.

Coinbase contended that California’s Unfair Competition Law did not apply to the claims made in the lawsuit, asserting that its decision to delist wBTC was based on sound business judgment and aligned with its platform policies.

“We’ve filed our response to BiT Global’s effort to stop our delisting of wBTC before any discovery or even formal response to their bogus claims,” Coinbase Chief Legal Officer Paul Grewal said on X.

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In November, Coinbase announced plans to delist wBTC from its platform on December 19, citing concerns identified during a routine evaluation of its listing standards. 

Coinbase’s December 17 court filing revealed that significant changes in the management of wBTC, including Sun’s majority control over the token’s Bitcoin reserves, led Coinbase and other organizations to reevaluate their support for the asset.

The U.S. Securities and Exchange Commission (SEC) has charged Sun, along with three of his companies, with violations of federal securities laws. Meanwhile, the FBI is reportedly investigating Sun for potential links to terror financing.

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Coinbase cited updated risk assessments for wBTC, conducted in accordance with its company listing standards, as the basis for its decision to delist the asset. The exchange pointed to concerns over Sun’s involvement, describing the move as “common sense” and a necessary step to safeguard its customers.

It urged the California Court to deny BiT Global’s request for a temporary restraining order (TRO) and its demand for $1 billion in damages.

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MICHAELA

Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.

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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is the official publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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