In a new episode of tensions in the crypto ecosystem, BiT Global, a firm linked to controversial businessman Justin Sun, has filed a lawsuit against Coinbase.
The main reason for the legal action is the platform’s decision to delist Wrapped Bitcoin (WBTC) and, shortly after, launch its own competing asset called cbBTC. This situation has sparked an intense debate in the crypto community about fair competition and the power of large platforms in the market.
Details of the lawsuit
The lawsuit, filed by Kneupper & Covey on behalf of BiT Global, accuses Coinbase of anti-competitive practices and violating multiple state and federal laws.
According to the lawyers, the removal of wBTC doubles the damage to the crypto ecosystem. On the one hand, it severely affects BiT Global, a company that plays a key role in the custody and maintenance of wBTC since BitGo redistributed responsibilities in August this year. On the other hand, it favors Coinbase's new competing product, cbBTC, which could gain an advantage thanks to Coinbase's prominent position as one of the most important exchange platforms.
Attorney Kevin Kneupper said the decision creates “a dangerous precedent” for the industry, as a dominant player like Coinbase could replicate similar strategies in the future. “If Coinbase can eliminate an asset as established as WBTC to make way for its competing product, who will be next in line?” Kneupper noted.
The context behind the elimination of WBTC
Coinbase announced on November 19 that it would remove WBTC from its platform starting in December 2024. According to the company, this decision is part of a periodic review of listing standards, however, the timing of the decision generated a wave of criticism in the community.
Shortly before, Coinbase launched cbBTC, a tokenized version of Bitcoin that has already reached a market capitalization of $2 billion, consolidating itself as the second largest after WBTC.
The move has raised eyebrows as it comes at a time when WBTC’s market cap has surpassed $13.4 billion , doubling in value since August. This highlighted the positive impact of the changes implemented by BitGo, together with BiT Global and its partners.
Coinbase's response
In response to the allegations, Coinbase has claimed that its decision to delist WBTC is legitimate and fully aligned with its asset listing integrity standards.
A company representative stated that “we regularly evaluate the assets listed on our platform, and when an asset does not meet our standards, we delist it.” Furthermore, the Coinbase team defended cbBTC’s position as an innovation that responds to user needs, although it avoided directly mentioning the conflict with WBTC.
However, the suit also accuses Coinbase of inconsistent listings, citing examples of memecoins with no fundamental value being integrated into the platform, while WBTC, a widely accepted asset among users, has been delisted.
The impact on the crypto ecosystem
WBTC is recognized as the first and most important Bitcoin tokenization that allows its use on blockchain networks, such as Ethereum, for DeFi applications and other solutions. Its removal from Coinbase, considered one of the largest and most trusted exchanges, could have negative effects on its adoption in the short term.
However, the lawsuit and controversy could raise questions about the business practices of centralized exchanges and reinforce the need to ensure greater transparency and neutrality.
In parallel, this event highlights the growing interest in tokenized assets. Competing products such as cbBTC suggest that the market is far from stagnating, although the impact of this conflict could influence future developments and regulatory standards for major players.
Conclusion
BiT Global's lawsuit against Coinbase could set a significant precedent for business relationships between exchanges and asset developers.
It also puts the spotlight back on the power that giant platforms like Coinbase have over the fate of established crypto projects. While awaiting the outcome of this legal conflict, the crypto ecosystem could experience adjustments both in investor perception and in regulatory dynamics.
What is clear is that dominance in tokenized asset adoption is entering a more pronounced competitive phase, where transparency will be key to building trust in the crypto community.
