BiT Global has initiated legal action against Coinbase, the leading cryptocurrency trading platform in the United States, as per a court filing on Dec. 13.
The crypto custodian linked to Justin Sun claimed that Coinbase unfairly removed wrapped Bitcoin (WBTC) from its platform in favor of its own product, Coinbase Wrapped Bitcoin (cbBTC).
Allegations of Antitrust Violations
The court filing alleges that Coinbase is using its dominant position in the crypto market to stifle competition. BiT Global accuses the exchange of breaching antitrust laws by replacing WBTC with cbBTC to establish control over the wrapped Bitcoin market.
The complaint asserts that Coinbase’s actions are not only anti-competitive but also strategically aimed at increasing transaction revenues as cbBTC gains popularity.
“On information and belief, Coinbase used this language—that it would not charge wrapping/unwrapping fees ‘today’—because it plans to do so once it has unfairly eliminated the competition.”
BiT Global challenges Coinbase’s justification for delisting WBTC based on “listing standards,” pointing to the exchange’s recent addition of meme coins like PEPE and MOG as evidence.
“The decision to allow users to trade these meme coins makes it clear that Coinbase did not delist WBTC due to any listing standard, but because Coinbase coveted WBTC’s market share and wanted it for itself.”
Through this legal action, BiT Global aims to restore competition and prevent further centralization of power, seeking to stop the delisting of WBTC and safeguard decentralized innovation in the crypto industry.
Overview of the Wrapped Bitcoin Market
Coinbase’s move to delist WBTC follows a tumultuous year for the asset. BiT Global emerged as a prominent custodian for WBTC after BitGo decentralized custody control to multiple entities, including the Hong Kong-based firm.
This development raised concerns within the DeFi community due to Justin Sun’s association with the crypto custodian, prompting MakerDAO and Aave to reconsider WBTC as collateral.
Despite initial concerns, DeFi protocols retained WBTC, but questions lingered about its long-term stability. In response to challenges, several firms, including Coinbase, introduced their own wrapped Bitcoin products.
However, Coinbase’s cbBTC quickly gained traction to become the second-largest wrapped Bitcoin product after WBTC. Deployed on Ethereum and its Layer 2 network Base in September, cbBTC currently boasts a market capitalization of approximately $2 billion.
Conversely, WBTC, holding a $13.7 billion market cap and ranking among the top 20 cryptocurrencies, experienced a reduction in token supply by over 20,000 BTC due to ongoing issues.
References:
