Coinbase To Delist WBTC After Judge Gives Thumbs Up
Coinbase announced in November that it would delist WBTC on December 19, after the token became affiliated with Tron founder Justin Sun.
Coinbase and Bit Global Clash in Court Over WBTC Delisting
California judge Araceli Martínez-Olguín gave crypto exchange Coinbase the green light to delist wrapped bitcoin (WBTC) despite attempts by digital asset custodian Bit Global to force Coinbase to continue offering the asset.
Lawyers representing the two firms sparred during a webinar on Wednesday before Martínez-Olguín delivered her ruling in favor of Coinbase.
After announcing its intention to delist WBTC in November, Coinbase was sued on Friday for $1 billion by Bit Global on antitrust grounds. Bit Global sought a temporary restraining order (TRO) from the courts to prevent the exchange from delisting the token, claiming “irreparable injury” and “harm” from Coinbase’s actions.
But during Wednesday’s court hearing, Bit Global’s lawyer – who appeared flustered at times, even stating, “I don’t want to be a blowhard,” – was unable to convince a visibly frustrated Martínez-Olguín to issue a TRO, allowing Coinbase to proceed with WBTC’s delisting, although Bit Global is free to present a stronger case for consideration in the future.
“At this juncture I will not issue a TRO,” Martínez-Olguín said. “I will not stop Coinbase from delisting WBTC.”
“If, Mr. Covey, you have more evidence, we can revisit this, but that’s my ruling today,” she added, referencing Bit Global’s lawyer, Cyclone Covey.
The decision is the latest chapter in the wrapped bitcoin (WBTC) delisting saga that began in August when WBTC custodian Bitgo announced a partnership with Bit Global, a company partly owned by infamous Tron Network founder Justin Sun.
Sun has been dogged by multiple allegations of fraud and market manipulation and is considered a questionable character by many in the crypto community.
Unsurprisingly, the partnership announcement drew significant backlash, prompting Bitgo CEO Mike Belshe to address the concerns publicly.
“We too were concerned that some would react this way to his name,” Belshe wrote, in reference to Sun. “Which is why we made sure to announce his involvement up front, even though he won’t actually have the ability to move any funds arbitrarily.”
The move caused stablecoin issuer Maker DAO to eliminate its exposure to WBTC and compelled Coinbase to engage Bit Global to determine the extent of Sun’s influence, but after Bit Global refused to disclose specific ownership details, Coinbase decided to delist the asset, effective December 19.
“Notwithstanding the substantial industry concern around Mr. Sun’s involvement and Coinbase’s repeated inquiries,” Coinbase wrote in a court filing. “BiT [Bit Global] provided no information to assure Coinbase that Mr. Sun would not be in a position to compromise WBTC’s integrity.”
Interestingly, Coinbase launched its own flavor of wrapped bitcoin called cbBTC in September, raising questions about the timing of the delisting.
“Because of the reduction of WBTC’s market share and the attack on its reputation, Bit Global stands to lose more than $1 billion in its market valuation, especially if Coinbase’s conduct continues unabated,” Bit Global’s legal team outlined in court documents.
WBTC still dominates the wrapped bitcoin niche, garnering 85% of the Ethereum market share while cbBTC is a distant second at 5.3%. WBTC trading volume on Coinbase represents only 1% of all WBTC trading, according to court documents.
