Coinbase Can Delist Wrapped Bitcoin (wBTC)

A California court has ruled that Coinbase can delist wrapped bitcoin (wBTC) after the first trial date for the lawsuit by BiT Global, a firm connected to Justin Sun. Coinbase previously announced it would remove wBTC on December 19.

BiT Global sought a temporary restraining order to prevent Coinbase from removing the tokenized bitcoin product, arguing it would cause irreparable harm. However, U.S. District Judge Araceli Martínez-Olguín stated that there was no justification to stop Coinbase’s decision.

A source familiar with the lawsuit indicated that the court found that BiT Global did not meet any factors necessary to intervene.

Coinbase had announced the delisting months after its former custodian, BitGo, partnered with BiT Global to manage wBTC. The exchange’s legal filing noted that Justin Sun has faced numerous allegations of financial misconduct. A source claimed, “We’re a private company… The idea that we’re like a utility is just bogus.”

BiT Global is suing Coinbase for allegedly violating federal and state laws regarding fair competition and for libel, claiming that Coinbase’s actions damaged BiT Global’s reputation. They pointed out that while wBTC is being delisted, Coinbase lists meme coins like MOG, PEPE, and WIF, which hold little utility.

Overview of wBTC

WBTC, launched in 2019, is the second-largest wrapped crypto token with a market cap of nearly $14 billion, enabling traders to use their bitcoin holdings in decentralized applications within the Ethereum ecosystem. In contrast, Coinbase Wrapped BTC (CbBTC), launched in September, has grown to a market cap of over $2.1 billion.

Coinbase denied accusations of monopolizing the wrapped bitcoin market, asserting that it accounts for less than 1% of wBTC trading activity. The source mentioned that the exchange might seek sanctions against BiT Global or its law firm for filing a “foolish claim.” Judge Martínez-Olguín appeared skeptical of BiT Global’s arguments during the proceedings.

Overall, the lawsuit claims that the removal of wBTC from Coinbase hurts BiT Global, but Coinbase maintains that no customer has abandoned BiT Global due to its actions. Following the delisting announcement, Sun appeared to distance himself from the protocol.

“Good luck, Mr. Sun, if you want to fool a federal judge as you do on-chain. It’s not going to end well,” the source predicted.