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Bit Global, the custodian that was recently added to WBTC through its partnership with Justin Sun, has sued Coinbase over the delisting decision.
They say Coinbase unfairly delisted WBTC in order to highlight its own competing product, cbBTC.
On November 19, Coinbase announced that it planned to delist wBTC from its platform starting December 19, 2024. The decision was attributed to a periodic review of listing standards. The timing coincided with a restructuring of the wBTC ecosystem, with BitGo, the asset’s longtime custodian, transferring partial control to BiT Global Trust, a Hong Kong-based organization with ties to Justin Sun and the Tron blockchain.
This partnership has raised suspicions within the crypto community, leading major decentralized finance (DeFi) platforms like MakerDAO and Aave to consider using wBTC as collateral, but neither has taken action. Launched in 2019, WBTC remains the largest tokenized version of Bitcoin with a market cap of over $13.4 billion, surpassing alternatives like renBTC and iBTC.
Under the new governance structure, BitGo oversees wBTC operations, while BiT Global Trust serves as the custodian for the Bitcoin backing the token. Control of wBTC’s collateral is now split between three entities: BitGo, BiT Global Trust, and a BiT Global subsidiary in Singapore, each of which owns one of the multi-signature keys. The lawsuit, filed on behalf of BiT Global by law firm Kneupper & Covey, accuses Coinbase of anti-competitive behavior. The lawsuit alleges that Coinbase’s actions violate state and federal laws and could harm BiT Global’s business.
“We believe this decision sets a terrible precedent for everyone in the crypto space,” attorney Kevin Kneupper said in a statement.
Coinbase responded to the allegations, saying: “Coinbase is committed to maintaining the high integrity of our listing standards and we regularly evaluate assets listed on our platform. If an asset fails to meet these standards, it is delisted.”
*This is not investment advice.