As reported by Cointelegraph, in a significant legal battle, cryptocurrency exchange Coinbase is facing a lawsuit exceeding $1 billion filed by BiT Global Digital Limited. The crux of the lawsuit revolves around allegations that Coinbase's decision to delist Wrapped Bitcoin (wBTC) has adversely affected the market for this digital asset.
According to the complaint submitted on December 13th, BiT Global contends that Coinbase's November decision to remove wBTC was not merely a routine business move; rather, it was strategically designed to bolster its own competing product, cbBTC. This action, BiT Global claims, has led to substantial financial losses and has undermined consumer confidence in wBTC.
The lawsuit encompasses serious accusations, including attempted monopolization of the wrapped Bitcoin market under the Sherman Act. Additionally, BiT Global alleges predatory practices aimed at destabilizing wBTC’s market position, along with claims that Coinbase made false statements suggesting that wBTC did not meet its listing standards.
Coinbase announced the delisting of wBTC on November 19th, citing "undisclosed failures to meet its standards for listing tokens." A spokesperson for Coinbase reiterated the company’s commitment to its listing standards, saying:
“Coinbase is committed to maintaining the high integrity of our listing standards, and we regularly evaluate assets listed on our platform. Should an asset fail to meet those standards, it is delisted.”
BiT Global, based in Hong Kong, has served as a joint custodian for wBTC’s Bitcoin reserves alongside crypto firm BitGo since August.
The lawsuit has been filed by the law firm Kneupper & Covey in the Northern District of California. The attorneys representing BiT Global assert that Coinbase has been actively listing memecoins on its platform while simultaneously questioning wBTC’s adherence to listing regulations, all shortly after launching a similar offering.
“We believe this decision sets a terrible precedent for everyone in the cryptocurrency space,” commented attorney Kevin Kneupper. “If an exchange of Coinbase’s size can delist a cryptocurrency just as it plans to launch its own competing product, who’s safe? And who’s next?”
The legal action seeks not only damages that surpass $1 billion but also includes demands for injunctive relief to avert any further detrimental impact on the market.
In a previous correspondence with Cointelegraph, a representative for BiT Global highlighted the competitive motivations behind Coinbase’s actions, asserting:
“It’s clear that Coinbase’s decision is an attempt to gain a competitive advantage, pushing forward their own wrapped Bitcoin product, cbBTC, and removing the largest and most influential competitor in wBTC.”
In its earlier announcement regarding the delisting, Coinbase stated that the decision stemmed from its ongoing evaluation of token standards, asserting:
“We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent review, Coinbase will suspend trading for wBTC (wBTC) on Dec. 19, 2024, on or around 12 pm ET.”
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