The well-known exchange Coinbase's delisting of wrapped Bitcoin WBTC has sparked significant controversy recently, and now the case has made new progress. The U.S. federal court ruled at a hearing on 12/18 to reject the temporary restraining order filed by WBTC custodian BiT Global against Coinbase, allowing Coinbase to suspend WBTC trading as originally planned on 12/19. The court stated that BiT Global failed to provide sufficient evidence to prove that the delisting action would cause 'immediate and irreparable harm,' leading to the rejection of the restraining order.
The controversy over the delisting originated from Justin Sun's involvement in WBTC management.
According to reports, Coinbase's announcement on 11/19 to fully stop WBTC trading on 12/19 sparked dissatisfaction from custodian BiT Global. BiT Global's response escalated from a gentle appeal to taking legal action, and on 12/13, they sued Coinbase, claiming that this decision would cause 'immediate and irreparable harm' to WBTC holders.
However, Coinbase responded in its answer on 12/17 that the reason for the delisting was that WBTC's primary reserve custodian BitGo announced in August that it would collaborate with BiT Global to share management rights over WBTC. Justin Sun, the founder of Tron, is also involved in the management, pointing out that Justin Sun is involved in fraud and market manipulation in the U.S., creating uncontrollable risks for WBTC. Justin Sun was previously sued by the U.S. Securities and Exchange Commission (SEC) for alleged fraud and market manipulation, leading to significant doubts about industry trust in him.
(Direct confrontation: Coinbase states that the delisting of WBTC is mainly due to Justin Sun)
The court rejected the application, stating that BiT Global's reasons were insufficient.
The federal court pointed out that BiT Global took legal action weeks after Coinbase announced the delisting, indicating that the 'delisting' was not as 'urgent' for BiT Global as they claimed.
Additionally, the court added that BiT Global's arguments lacked substantial evidence and were mostly speculative and hypothetical issues. Coinbase's lawyer Sonal Mehta emphasized at the hearing that the decline in WBTC's circulation actually began after BiT Global announced Justin Sun's involvement in management, rather than being a primary focus of Coinbase's delisting.
Coinbase's Chief Legal Officer Paul Grewal also expressed gratitude for the ruling on Twitter, with many netizens commenting in support of Coinbase.
Coinbase's legal team expressed significant gratitude. Whether Coinbase is taking advantage of the situation remains a matter of debate between both sides.
At the hearing, BiT Global's lawyer Cyclone Covey argued that Coinbase used Justin Sun as an excuse to delist WBTC, accusing Coinbase of not raising concerns in August but instead waiting until November to announce the decision to delist. He further criticized Coinbase for being skeptical of the SEC and the FBI while using their investigation into Justin Sun as a reason for the delisting, with both sides presenting conflicting narratives.
Although the federal court currently supports Coinbase's delisting of WBTC, it also allows BiT Global to submit more evidence to continue its appeal. How both sides handle these issues will undoubtedly affect the future direction of the industry.
(Coinbase is sued by BiT Global for 1 billion dollars due to the delisting of WBTC! Justin Sun enters the battlefield: Is there a double standard?)
This article states that the U.S. federal court supports Coinbase's delisting of WBTC! BiT Global's injunction application was rejected, and Coinbase's legal team expressed gratitude to the court. It first appeared in Chain News ABMedia.
