Coinbase Can Delist Wrapped Bitcoin (wBTC)

A California court has ruled that Coinbase can delist wrapped bitcoin (wBTC) on the first trial date of BiT Global’s lawsuit against the exchange connected to Justin Sun. Coinbase announced in November the removal of wBTC on December 19.

The Lawsuit

BiT Global sought a temporary restraining order to prevent the delisting, claiming it would cause imminent harm. However, U.S. District Judge Araceli Martínez-Olguín found no grounds to stop Coinbase from proceeding with the delisting.

A source close to the lawsuit stated, “They were trying to stop us dead in our tracks,” emphasizing that the court determined BiT Global did not meet a single factor for their request.

In November, Coinbase's decision coincided with the former custodian of wBTC, BitGo, partnering with BiT Global to manage the tokenized asset. Coinbase's court filing stated that Justin Sun, an advisor to BiT Global, faced multiple allegations of financial misconduct.

A Coinbase representative remarked, “We’re a private company. We have the right to make decisions… the idea that we’re a utility is just bogus.”

BiT Global's Claims

BiT Global has accused Coinbase of violating federal and state laws meant to promote fair competition, alleging a monopoly attempt in launching a rival token, cbBTC. They also claim libel against Coinbase for creating fear, uncertainty, and doubt that harmed BiT Global’s reputation.

While Coinbase announced the delisting of wBTC after a periodic review, it has listed various memecoins, which BiT Global argues have less utility.

WBTC Overview

Launched in 2019, WBTC is the second-largest wrapped crypto token, with a market cap near $14 billion, allowing bitcoin to be used in decentralized applications on Ethereum. Coinbase Wrapped BTC (CbBTC), launched in September, has a market cap of over $2.1 billion.

Coinbase refuted claims of monopolization, stating its platform captures less than 1% of wBTC trading activity. The exchange further suggested potential sanctions against BiT Global for the legal claims made.

Conclusion

The court found no merit in BiT Global’s claims, and the ongoing situation highlights the complexities of competition and regulation within the crypto market. Following the announcement, Sun has attempted to distance himself from wBTC's protocol.

The Coinbase representative also remarked, “Good luck to you, Mr. Sun, if you want to trick a federal judge as you do in the crypto space.”