Coinbase is in trouble after being slapped with a $1 billion lawsuit related to its decision to delist Wrapped Bitcoin.
The legal drama sparked questions about the exchange’s token listing criteria in the industry.
Private business?
The lawsuit was filed by BiT Global Digital, and it claims that Coinbase’s delisting of wBTC in November harmed the crypto market, and they allege that the exchange removed wBTC to promote its own competing token, cbBTC.
This lawsuit hit just a day after Coinbase announced the delisting.
In response to the backlash, Coinbase’s chief legal officer, Paul Grewal, shared his opinion on X to defend the exchange’s practices, and emphasized that Coinbase is committed to maintaining high listing standards.
Coinbase first hinted at developing cbBTC four months ago, which many viewed as a promising step for Bitcoin-native DeFi, also known as BTCFi.
“When an asset no longer meets our listing standards, we will drop it. When another asset can meet or exceed market requirements without sacrificing those standards, we will list it.”
Pushback
Grewal’s defense didn’t sit well with everyone. Justin Sun, the founder of Tron, questioned Coinbase’s transparency and pointed out a contradiction between Grewal’s statement and earlier comments made by Coinbase CEO Brian Armstrong.
It seems that Coinbase’s CEO doesn’t agree with your perspective. Who has the final say at Coinbase? pic.twitter.com/sia4TW5SQe
— H.E. Justin Sun 🍌 (@justinsuntron) December 14, 2024
Sun even shared a screenshot showing Armstrong claiming that Coinbase is asset agnostic and believes consumers should have choices in the crypto economy.
The lawsuit alleges that Coinbase’s actions amount to monopolizing the wrapped Bitcoin market under the Sherman Act.
It accuses the exchange of using predatory practices, including making false statements about wBTC’s compliance to weaken its market position, and BiT Global argues that these actions were all part of a strategy to boost cbBTC’s dominance.
A spokesperson for Coinbase reiterated their commitment to high listing standards:
“Coinbase is committed to maintaining the high integrity of our listing standards. Should an asset fail to meet those standards, it is delisted.”
wBTC no, memecoins yes?
The delisting announcement was made on November 19, citing undisclosed failures for wBTC not meeting their listing criteria.
Then the lawsuit was filed by Kneupper & Covey in the U.S. District Court for the Northern District of California, and BiT Global’s attorneys noted that while they challenge wBTC’s compliance with listing standards, Coinbase has been busy onboarding memecoins for trading on its platform.
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