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In summary
- BiT Global sued Coinbase for planning to delist WBTC, accusing them of promoting anti-competitive practices to boost cbBTC.
- WBTC circulation fell 5% following the delisting announcement, supporting BiT Global’s monopoly accusations.
- Justin Sun’s involvement in BiT Global sparked criticism, raising concerns about his handling of WBTC and other assets.
BiT Global has sued Coinbase for announcing plans to delist the largest Wrapped Bitcoin token — or WBTC — alleging that the San Francisco-based exchange did so in a “predatory and unfair” move that “violates both federal and state law.” “
A Friday lawsuit by the Cryptocurrency custodian alleged that Coinbase, the largest U.S. cryptocurrency exchange, unfairly plans to remove WBTC from its platform — a move planned for Dec. 19 — in order to push its own version of the digital token.
“Like all centralized technology giants before it, Coinbase provides superficial service to the innovation of a decentralized world,” Friday’s lawsuit says. “But in the case of wrapped Bitcoin, Coinbase saw it as another way to make money.”
The lawsuit further alleged that Coinbase’s listings of memecoins and tokens—such as Dogwifhat (WIF), Pepe (PEPE), and Mog Coin (MOG)—“without inherent value” prove that the exchange delisted WBTC in an attempt to have a monopoly over the industry.
WBTC is the 18th largest cryptocurrency, with a market capitalization of $13.7 billion, according to CoinGecko. BiT Global helps custody the tokens, which are backed 1:1 with Bitcoin, but operate on Ethereum.
Traders use WBTC to be able to use their Bitcoin holdings on other platforms and applications in the crypto ecosystem that are not natively compatible with Bitcoin.
Coinbase launched its own wrapped Bitcoin token in September, called Coinbase Wrapped BTC, or cbBTC. Then last month, it delisted WBTC, citing that it did not meet the exchange’s listing standards.
BiT Global alleged on Friday that this was an unfair trade practice. “Having decided to copy WBTC with its own product, Coinbase resorted to unfair and deceptive tactics that have long been used by technology giants to crush their competition,” BiT Global’s lawsuit added.
The cryptocurrency custodian added in the lawsuit that WBTC circulation fell 5% in two weeks after the delisting, claiming this was further evidence that Coinbase “coveted WBTC’s market share and wanted it for itself.”
In August—prior to the launch of cbBTC—industry experts told Decrypt that the token had the potential to dominate the cryptocurrency market.
WBTC attracted controversy in the crypto world when BitGo — which also custodians WBTC — announced its partnership with BiT Global to help custody the token. Some in the decentralized finance industry noted that Justin Sun’s involvement with BiT Global presented “an unacceptable level of risk.” Sun is the cryptocurrency magnate behind the Tron network.
MakerDAO, which issues the DAI stablecoin, highlighted that TUSD — another stablecoin — became less transparent under Sun’s involvement.
Coinbase told Decrypt in an email statement that it is “committed to maintaining the high integrity of our listing standards, and we regularly evaluate assets listed on our platform.”
BiT Global did not immediately respond to Decrypt’s email questions.
Edited by Andrew Hayward
Editor’s note: This story was updated after publication with additional details, and to clarify that the token is scheduled to be delisted on December 19 following an announcement of the planned move.
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