Coinbase Opposes $1 Billion Lawsuit Over WBTC Delisting by Bit Global

Coinbase has thrown a legal argument against a lawsuit from Bit Global Digital Limited, which aims to overturn Coinbase’s choice to drop wrapped bitcoin (WBTC) from its exchange.

Coinbase Defends Its Decision to Delist WBTC

In a court filing submitted on Tuesday, Coinbase defended its action, claiming it was a necessary step to shield its platform’s integrity and its customers from the potential hazards linked to Justin Sun’s association with WBTC. The legal tussle kicked off after Coinbase announced on Nov. 19, 2024, that it would give the boot to WBTC, a token created by Bitgo and backed by bitcoin (BTC).

Bit Global, having jumped on board with Bitgo’s WBTC operations recently, cries foul, saying Coinbase’s decision has wreaked havoc on their finances and tarnished their reputation, hence demanding a whopping $1 billion in damages and an immediate re-listing. In its defense, Coinbase pointed out that its internal checks raised red flags after Bitgo’s Aug. 2024 announcement of a joint venture with Bit Global, which has ties to Tron’s Justin Sun.

The filing pulls no punches, listing accusations against Sun and his ongoing legal battles. Coinbase referenced a current Securities and Exchange Commission (SEC) case against Sun, alongside alleged whispers of criminal investigations, as just cause for alarm. “Continuing to list WBTC could compromise the integrity of its platform and put customers at risk,” Coinbase declared, while also claiming that Bit Global dodged questions about its ownership structure during the review.

Coinbase’s defense said the company had repeatedly asked for transparency about Sun’s influence over Bit Global but got little in return. The court filing insists Coinbase stood firm on its commitment to stringent listing rules. The exchange said it nixes assets that don’t make the grade to keep its customers safe and secure. “Coinbase earns and retains user trust in its exchange by monitoring listed assets and delisting those that fall out of compliance with its publicly announced listing standards,” the filing states.

The exchange also scoffed off Bit Global’s financial damage claims, pointing out that WBTC trades on Coinbase make up less than 1% of the token’s worldwide trading activity. “[The lawsuit] never explains how Delisting WBTC from a single exchange that hosts a de minimis (less than 1%) portion of WBTC trading could wreak irreparable harm. Bit’s claimed reputational harms fail as well,” Coinbase argued.