BiT Global has taken legal action against Coinbase, the leading cryptocurrency exchange in the United States, as per a recent court filing on December 13. The lawsuit alleges that Coinbase unjustly removed wrapped Bitcoin (WBTC) from its platform in favor of promoting its in-house product, Coinbase Wrapped Bitcoin (cbBTC).
The complaint filed by the Justin Sun-affiliated crypto custodian accuses Coinbase of engaging in antitrust violations by using its dominant position in the crypto market to stifle competition. It claims that Coinbase’s decision to replace WBTC with cbBTC is aimed at gaining control over the wrapped Bitcoin market and increasing transaction revenues through higher fees associated with cbBTC.
The court filing suggests that Coinbase’s justification for delisting WBTC based on “listing standards” is unfounded, pointing to the exchange’s recent inclusion of meme coins like PEPE and MOG as evidence. This move indicates that the delisting was not about quality but rather a strategic attempt to capture WBTC’s market share.
BiT Global aims to restore competition in the wrapped Bitcoin market and prevent further centralization of power through this lawsuit. The firm seeks to reverse the delisting of WBTC and safeguard decentralized innovation within the crypto space.
Coinbase’s decision to delist WBTC follows a turbulent year for the asset, with BiT Global emerging as a key custodian for WBTC after BitGo’s decision to distribute custody control to multiple entities, including the Hong Kong-based firm. Concerns within the DeFi community arose due to Justin Sun’s association with the crypto custodian, prompting some protocols like MakerDAO and Aave to reconsider WBTC as a collateral asset.
Despite these challenges, several firms, including Coinbase, introduced their own wrapped Bitcoin products. Coinbase’s cbBTC has quickly gained traction to become the second-largest wrapped Bitcoin product after WBTC, with a market capitalization of approximately $2 billion. On the other hand, WBTC, with a market cap of $13.7 billion, has faced challenges leading to a decrease in its token supply by over 20,000 BTC.
Overall, the legal battle between BiT Global and Coinbase underscores the evolving landscape of the wrapped Bitcoin market and the competitive dynamics within the crypto industry.