Coinbase ends legal battle with BiT Global over wBTC delisting
BiT Global agreed to dismiss its lawsuit against Coinbase for delisting the wBTC after the cryptocurrency exchange launched a competitor token, the cbBTC.
In a filing, lawyers for BiT Global, an entity backed by TRON founder Justin Sun, who last year became a strategic partner to BitGo in providing the wBTC-wrapped Bitcoin token, said they had agreed to dismiss the suit with prejudice. This means the case cannot be brought again.
Additionally, the two companies each said they would incur their own legal expenses in connection with the complaint
Sun’s link to wBTC caused ETH DeFi protocols to stop supporting it as a collateral asset
Wrapped Bitcoin tokens facilitate the use of Bitcoin on various blockchain networks. Both wBTC and cbBTC target the Ethereum ecosystem. However, the tokens do not offer any direct claim to the Bitcoin unless one trusts a central intermediary to custody the Bitcoin and release the wrapped token.
Sun’s association with wBTC caused Ethereum DeFi protocols MakerDAO and Aave to contemplate disintegrating the support of the token as a collateral asset, ultimately deciding on tougher risk parameters rather than a complete exit.
According to reports from credible sources, the lawsuit was filed in December 2024 by Kneupper & Covey on behalf of BiT Global, and it was claimed that if Coinbase delisted wBTC, it would be an example of anti-competitive behavior. It would also break several state and federal laws.
The suit highlighted that having demonstrated the value represented by wBTC, Coinbase reversed course and removed wBTC from its platform. This made it impossible for anyone to trade it on Coinbase. The change came shortly after they launched their own similar version: cbBTC.
Following the dismissal of the lawsuit, Paul Grewal, Coinbase’s top lawyer, stated that this important win affirms their clear right to manage security and risk for Coinbase users. Grewal added, “…we will not be bullied into continuing to list an asset that puts our customers at risk.”
Previously, the exchange’s chief legal officer had defended its approach, stressing its dedication to high listing standards.
He wrote on an X post that when an asset does not meet their listing standards anymore, they remove it. He further stated that they would add it to their list if another asset could meet or do better than market requirements while still following those standards.
Grewal’s post faced criticism from crypto-industry insiders, including Tron founder Justin Sun, who accused the company of lacking transparency and asked how Grewal’s post squared with previous comments by Coinbase CEO Brian Armstrong.
An attached image provided by Sun depicted a screenshot of Coinbase CEO Brian Armstrong, who says Coinbase was agnostic to assets because it believes that consumers deserve options in the crypto economy.
Mike Belshe defends BitGo as having a solid reputation after Sun’s backlash
Earlier legal attempts to stop Coinbase from delisting the token were unsuccessful after a federal judge in December sided with Coinbase and said it had the right to delist the token.
The transfer of wBTC from being managed only by the custody company BitGo to a partnership involving Sun faced backlash from people in the cryptocurrency world.
In response to this criticism, BitGo CEO Mike Belshe revealed that he believes BitGo has a solid reputation because they follow the highest security standards in everything they do. Belshe concluded that
Ultimately, he thinks people will see that this is not a big deal.
The current market capitalization for the wBTC token is about $13.6 billion, with Coinbase’s cbBTC valued at about $4.7 billion, according to CoinGecko data. Both of these tokens are almost at an all-time high market cap.
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Original reporting: cryptopolitan.com
