Justin Sun’s BiT Global Sues Coinbase

Justin Sun’s BiT Global, a key stakeholder in the wrapped bitcoin (wBTC) ecosystem, is suing crypto exchange giant Coinbase after the exchange decided to delist the asset and launch a competing product.

On Nov. 19, Coinbase announced it would delist WBTC starting Dec. 19, 2024, citing a periodic review of its “listing standards.” This decision followed BitGo's disclosure that it would distribute control over wBTC's custody to three entities, including the Hong Kong-based trust company BiT Global.

This strategic partnership involving BitGo, Justin Sun, and the Tron ecosystem faced skepticism from the crypto community. Major DeFi projects MakerDAO and Aave considered removing wBTC as a collateral asset but ultimately chose not to.

WBTC is the first and largest tokenized version of BTC trading on Ethereum and other blockchains, with a market capitalization of over $13.4 billion.

Under the new agreement, BitGo will manage the wBTC business while BiT Global Trust will act as the custodian of the underlying wBTC collateral. Each of the three involved parties will hold one of the multisig keys.

Anticompetitive Claims

Law firm Kneupper & Covey, representing BiT Global, filed the lawsuit alleging that Coinbase’s decision to delist wBTC is anti-competitive, in violation of several state and federal laws, and detrimental to BiT Global.

Attorney Kevin Kneupper stated, “If an exchange of Coinbase’s size can delist a cryptocurrency just as it plans to launch its own competing product, who’s safe? And who’s next?”

A Coinbase representative defended the move, pointing out that they regularly evaluate listed assets. They emphasized that assets failing to meet the standards will be delisted.

The lawsuit also noted that in recent weeks, Coinbase has listed several “fundamentally valueless” memecoins while suddenly claiming that wBTC does not meet its standards. The complaint alleges that once wBTC's value was proven, Coinbase changed the rules, delisting it right after launching cbBTC, its own competing product.

Coinbase launched cbBTC on Ethereum and its L2 network Base in September 2024. It currently holds the position of the second-largest tokenized version of bitcoin, with a market cap just above $2 billion.

Despite concerns over Sun’s involvement, wBTC’s market capitalization has grown significantly since BitGo's announcement in August, when it was around $8 billion.

Sarah Wynn contributed additional reporting.