Emily Walker
A prominent cryptocurrency exchange may be liable for up to $1 billion due to the removal of a digital token from its services.
The company behind Wrapped Bitcoin, Bit Global Digital, has initiated legal action against Coinbase for the financial damages suffered after the exchange dropped its cryptocurrency.
Bit Global Digital’s Lawsuit Against Coinbase
Bit Global Digital has filed a lawsuit against Coinbase, claiming that the removal of Wrapped Bitcoin was executed to weaken competition and benefit Coinbase.
The issuer asserts that this delisting has caused around $1 billion in losses, and they seek compensation for the unjust decision to remove the token from the platform.
The lawsuit, lodged in the U.S. District Court for the Northern District of California, includes eight claims, such as attempted monopolization, unfair competition, and trade libel. Bit Global Digital argues that Coinbase’s actions have severely harmed both the company’s finances and the reputation of Wrapped BTC, eroding consumer trust in the token.
Coinbase’s Introduction of New Asset
Bit Global Digital accuses Coinbase of removing Wrapped Bitcoin to eliminate competition for its newly launched asset, cbBTC, which directly competes with Wrapped BTC.
Coinbase introduced cbBTC in September 2024, making it available on Ethereum, Base, and Solana.
According to their complaint, just two months after the introduction of cbBTC, Coinbase declared on X that it would suspend trading for Wrapped BTC, effectively removing competition and restricting the marketplace for the token.
Bit Global Digital contends that Coinbase failed to give a valid reason for the delisting and did not allow any recourse for appeal.
In the complaint, Bit Global Digital emphasized that Coinbase’s decision was aimed at forcing users of wrapped Bitcoin to switch to cbBTC, which they deem as an unethical competitive strategy breaching both state and federal laws.
Claim on WBTC Standards
Coinbase announced on November 19 that it would stop trading Wrapped Bitcoin effective December 19, citing the token’s failure to meet its listing requirements.
“We regularly monitor assets on our exchange to ensure compliance with our listing criteria. After our latest assessment, we will suspend trading for wBTC (wBTC) on December 19, 2024, around 12 pm ET,” Coinbase stated on X.
The exchange did not clarify what specific criteria Wrapped Bitcoin was said to have violated.
However, Bit Global Digital refuted Coinbase’s assertion, arguing that “Coinbase has not publicly disclosed which listing standards wBTC does not comply with.”
“By opting to imitate wBTC with its own offering, Coinbase has engaged in misleading and unfair practices typically utilized by larger tech corporations to eliminate competition,” the complaint asserts.
As of the latest update, Wrapped Bitcoin is valued at $101,355, boasting a market cap exceeding $13 billion.
Featured image courtesy of NPR, chart sourced from TradingView