Coinbase Faces $1 Billion Lawsuit Over Wrapped Bitcoin Delisting

In a high-stakes legal dispute, Coinbase, one of the world’s largest cryptocurrency exchanges, is being sued for over $1 billion by BiT Global Digital Limited, a Hong Kong-based firm. The lawsuit, filed on December 13, 2024, alleges anti-competitive practices following Coinbase’s controversial decision to delist Wrapped Bitcoin (wBTC) from its platform.

According to a statement from BiT Global, Coinbase’s actions were aimed at promoting its own competing product, cbBTC. The exchange announced the removal of wBTC on November 19, 2024, citing failures to meet its crypto listing standards. However, BiT Global disputes this reasoning, noting that Coinbase recently approved several highly speculative tokens, including memecoins. This inconsistency, BiT Global asserts, undermines Coinbase’s justification for the delisting.

Allegations of Anti-Competitive Behavior

BiT Global’s complaint accuses Coinbase of market sabotage and attempts to monopolize the wrapped Bitcoin market, a potential violation of U.S. antitrust laws under the Sherman Act. Per the lawsuit, the removal of wBTC has inflicted substantial financial damage on BiT Global and diminished consumer trust in the digital asset. The company is seeking over $1 billion in damages and has requested court-ordered measures to prevent further harm.

Read more: Crypto.com Sues SEC, Alleging Regulatory Overreach in Crypto Industry

Kevin Kneupper, the attorney representing BiT Global, criticized Coinbase’s actions in a public statement. “We believe this decision sets a terrible precedent for the entire cryptocurrency space,” Kneupper said. “If a platform as large as Coinbase can delist a crypto just at the moment when it launches its own competing product (cbBTC), who is safe? And who will be next?”

Coinbase Defends Decision

For its part, Coinbase maintains that its decision to delist wBTC was part of a routine review of listed assets. The exchange stated that its asset evaluations are designed to ensure compliance with its listing standards, though it declined to comment directly on BiT Global’s allegations.

Broader Implications for the Crypto Industry

This legal battle could have far-reaching consequences for the cryptocurrency sector, particularly in how exchanges manage asset listings and competition. The case also highlights growing concerns about the concentration of power in major crypto platforms, which play a pivotal role in shaping the market landscape.

Investors and industry stakeholders are watching the proceedings closely, as the outcome may influence future regulatory frameworks and competitive practices in the fast-evolving digital asset market.

Source: CoinTribune