Justin Sun's BiT Global has recently become a major stakeholder in the wrapped Bitcoin (wBTC) ecosystem, and the company is suing cryptocurrency exchange giant Coinbase, which decided last month to delist the asset and launch a competing product.
On November 19, Coinbase announced it would delist WBTC starting December 19, 2024, citing the need to regularly review its 'listing standards.' For months, since the launch of wBTC in January 2019, BitGo has been the primary custodian of wBTC. The company disclosed that it would allocate custody control of the project to three entities, including the Hong Kong trust company BiT Global, which is associated with Justin Sun. The so-called 'strategic partnership between BitGo, Justin Sun, and the Tron ecosystem' has been questioned by many in the crypto community. For example, major DeFi projects MakerDAO and Aave began considering removing wBTC as a collateral asset but ultimately did not proceed with that.
WBTC is the first and largest tokenized version of BTC, tradeable on Ethereum and other blockchains. According to CoinGecko data, its current market cap exceeds $13.4 billion—far surpassing other on-chain Bitcoin representations like renBTC, wrapped Bitcoin from 21.co, and iBTC. Under the new protocol, BitGo will manage and operate the wBTC business, while BiT Global Trust will serve as the custodian of the underlying wBTC collateral. BitGo, BiT Global, and BiT Global's subsidiary in Singapore will hold one of the three wBTC multi-signature keys, respectively. The antitrust representative for BiT Global, law firm Kneupper & Covey, has filed a lawsuit claiming that Coinbase's decision to delist wBTC is anti-competitive and violates 'numerous state and federal laws.'
The delisting will also 'harm' BiT Global. 'We believe this decision sets a terrible precedent for everyone in the cryptocurrency space,' attorney Kevin Kneupper stated in a statement on Friday. 'If an exchange of Coinbase's scale can delist a cryptocurrency while planning to launch its own competing product, then who is safe? Who's next?' A representative from Coinbase told The Block: 'Coinbase is committed to maintaining the high integrity of our listing standards, and we regularly evaluate the assets listed on our platform.' 'If an asset fails to meet these standards, it will be delisted.' The law firm noted that in recent weeks, Coinbase has listed some 'meme coins that have no fundamental value,' 'despite these coins meeting its standards, Coinbase suddenly claimed that wBTC does not.'
The lawsuit states: 'After the value of wBTC was proven, Coinbase changed the rules and delisted wBTC from its platform, making it no longer tradable on Coinbase—this was done shortly after Coinbase launched its own altcoin cbBTC.' Coinbase launched cbBTC on Ethereum and its L2 network Base in September 2024. It now represents the second-largest tokenized version of Bitcoin, with a market cap slightly above $2 billion.
Despite strong opposition to Justin Sun's increasing involvement in the project, the market cap of wBTC has significantly increased since BitGo announced this news in August, when its market cap was around $8 billion. The Block has reached out to Kneupper & Covey and Tron representatives for comment.
