Coinbase faces a $1 billion cryptocurrency lawsuit from Hong Kong-based BiT Global Digital Limited over its plans to delist Wrapped Bitcoin (wBTC). BiT claims that Coinbase’s decision was an intentional attempt to monopolize the market and drive its own rival product, cbBTC.
According to the lawsuit, filed on December 13 in the Northern District of California, Coinbase faces allegations of anti-competitive practices under the Sherman Act.
Coinbase’s wBTC Delisting “Damaged Consumer Confidence”
The Hong Kong-based exchange accuses Coinbase of causing significant financial losses and damaging consumer confidence in the asset. Additionally, the filing accuses Coinbase of making false statements that suggest that wBTC failed to meet its listing requirements.
Coinbase announced the delisting on November 19, with Coinbase citing unspecified shortfalls of wBTC in meeting its token listing standards. In response, BiT Global’s legal team, led by law firm Kneupper & Covey, argued that Coinbase’s approach was misleading.
While commenting on the development, attorney Kevin Kneupper claims, "We believe this decision sets a terrible precedent for everyone in the cryptocurrency space." "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?"
BiT Global, which has been a joint custodian of wBTC's Bitcoin reserves alongside crypto firm BitGo, links Coinbase's delisting with a launch of its own rival wrapped Bitcoin product, cbBTC. According to the legal filing, Coinbase's actions were deliberately done to diminish the competitiveness of wBTC and pave the way for cBTC's market dominance.
The filing demands over $1 billion in damages and requests injunctive relief to prevent additional harm.
Meanwhile, Coinbase's earlier announcement concerning the delisting claims its actions were tied to its commitment to high standards over token listings. "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, at or around noon ET," read the announcement.
Coinbase Set to Embrace More Revenue Streams in Trump Era
Meanwhile, Coinbase’s Vice President of International Policy, Tom Duff Gordon, announced in November that the exchange intends to shift towards more predictable revenue streams. He highlighted revenue streams like stablecoin fees, staking rewards, and subscription services as potential options for the exchange under the Trump-led administration.
“We want to build an earnings profile that isn’t entirely dependent on market volatility,” he explained. As President-elect Donald Trump prepares to take office, the cryptocurrency community expects reduced regulatory friction across board, which is already taking shape to provide additional hope to U.S.-based exchanges like Coinbase.
The cryptocurrency industry emerged as a significant contributor to financing politicking during the November elections in the US. Reports claim that industry-funded PACs raised to $190 million. Coinbase CEO Brian Armstrong reportedly gave over $1.3 million to both Republican and Democratic PACs, alongside a $25 million donation to Fairshake PAC ahead of the upcoming 2026 midterm elections.
Final Remarks
Coinbase faces a $1 billion lawsuit over its decision to delist wrapped Bitcoin wBTC over claims that the token falls short of its listing standards. The U.S.-based exchange's plight stems from a legal filing from BiT Global Digital Limited which accuses Coinbase of anti-competitive practices that mislead consumers in a cryptic bid to promote its own soon-to-be-launched wrapped Bitcoin cbBTC.