Coinbase faces $1Billion lawsuit for delisting wBTC

December 15, 2024

Coinbase is facing a $1 billion lawsuit filed by BiT Global Digital Limited, which challenges the exchange’s decision to delist Wrapped Bitcoin (wBTC).

The Hong Kong-based platform alleges that Coinbase’s action was a calculated effort to dominate the market and promote its own competing product, cbBTC. The lawsuit, filed on December 13 in the Northern District of California, accuses Coinbase of engaging in anti-competitive behavior in violation of the Sherman Act.

Coinbase’s Delisting of wBTC Undermines Market Confidence

BiT Global claims that the delisting of wBTC resulted in substantial financial losses and eroded consumer trust in the token. The lawsuit further alleges that Coinbase made misleading statements suggesting wBTC failed to comply with its listing standards.

The decision to delist wBTC was announced on November 19, with Coinbase citing unspecified reasons related to its token listing criteria. BiT Global’s legal representation, led by the law firm Kneupper & Covey, contests these claims as inaccurate.

“We believe this decision sets a terrible precedent for everyone in the cryptocurrency space,” said attorney Kevin Kneupper. “If an exchange of Coinbase’s size can delist a cryptocurrency just as it plans to launch its own competing product, who’s safe? And who’s next?”

BiT Global has been a co-custodian of wBTC’s Bitcoin reserves, alongside crypto firm BitGo, since August 2024. The exchange alleges that Coinbase delisted wBTC shortly after introducing its own wrapped Bitcoin product, cbBTC. According to the lawsuit, Coinbase’s actions were aimed at undermining wBTC’s competitiveness and positioning cbBTC as the dominant market player.

The filing seeks over $1 billion in damages and requests court intervention to prevent further harm.

Coinbase Defends Delisting Decision

In a prior announcement, Coinbase reaffirmed its commitment to maintaining high standards for token listings.

“We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent review, Coinbase will suspend trading for wBTC (wBTC) on Dec. 19, 2024, on or around 12 pm ET,” the company stated.

Shifting Strategy Under Trump’s Leadership

Last month, Tom Duff Gordon, Coinbase’s Vice President of International Policy, revealed plans to pivot towards more stable revenue sources such as stablecoin fees, staking rewards, and subscription services under the Trump administration. “We want to build an earnings profile that isn’t entirely dependent on market volatility,” he noted.

The anticipated easing of regulatory challenges under the new administration has sparked optimism among U.S.-based exchanges like Coinbase. Gordon reaffirmed the company’s focus on the domestic market, emphasizing, “The U.S. will continue to be our most important market.”

Cryptocurrency’s Role in Political Financing

The cryptocurrency industry has become a major contributor to political funding during the 2024 election cycle, with industry-supported PACs raising $190 million.

Among the most prominent donors are the Winklevoss twins, Cameron and Tyler, who have contributed a combined $10.1 million. Other significant donors include Coinbase CEO Brian Armstrong, who has donated over $1.3 million to both Republican and Democratic PACs.

Coinbase has also pledged $25 million to the super PAC Fairshake, aiming to support pro-crypto candidates in the 2026 midterm elections.