BiT Global has initiated litigation against Coinbase, alleging that the exchange engaged in anticompetitive conduct in connection with the delisting of wBTC.
BiT Global is suing Coinbase for the expenditure of wrapped Bitcoin (wBTC). The crypto firm claims that Coinbase’s anti-competitive action could impair its business and that it violated state and federal laws.
Coinbase announced on November 19, 2024, that it would delist wBTC by December 19. Periodic evaluations of its listing standards were the impetus for the exchange’s decision.
BitGo made an announcement regarding a strategic partnership with BiT Global to supervise the custody of wBTC less than a week ago.
BitGo, the primary custodian of wBTC, also disclosed that asset custody would be distributed among three entities.
However, BitGo, Bit Global Trust, and a subsidiary in Singapore each possess one of the multisig keys. However, this did not deter wBTC, and its status remained unaltered in spite of concerns from prominent DeFi platforms like MakerDAO and Aave.
BiT Global has become a critical component of wBTC’s future as a result of its affiliation with Justin Sun. The new partnership, however, included a Hong Kong-based trust corporation that assumed a portion of the custody responsibilities.
However, the market capitalization of wBTC continued to increase, despite the concerns of sceptics in the crypto community regarding the transition to control of this asset.
Kneupper & Covey, who are representing BiT Global, filed a lawsuit alleging that Coinbase’s decision had a detrimental impact on the market.
The firm contended that Coinbase had contravened antitrust laws in its argument. BiT Global asserts that the delisting will have a detrimental impact on its business and will establish a deleterious precedent.
The lawsuit alleges that Coinbase attempted to delist wBTC shortly after the introduction of a competing product, cbBTC.
This action, according to BiT Global, compromises the integrity of the cryptocurrency space, as they possess bitcoin in excess of the United States’ currency.
Additionally, it contends that Coinbase has not consistently adhered to its listing standards due to the inclusion of memecoins on its platform.
The lawsuit asserts that Coinbase’s conduct is particularly concerning due to its market influence. Coinbase claims that the delisting of wBTC grants its new product, cbBTC, an inherent competitive advantage.
BiT Global contends that this action is unjust because it disproportionately undermines the company’s market competitiveness.
Coinbase has defended its decision to conduct regular reviews of listed assets in order to preserve the platform’s integrity.
A delisting will occur for any asset that fails to satisfy its criteria. The decision was made after a comprehensive evaluation of whether wBTC met those standards, according to a Coinbase representative.
The exchange stated that its evaluation procedure entails verifying the legitimacy and market value of an asset.
Nevertheless, Coinbase maintains that its actions are in accordance with its internal policies. The exchange exclusively lists assets that satisfy its rigorous standards.
Coinbase introduced cbBTC in September 2024, basing it on the Layer 2 network, Base, and Ethereum. The market capitalization of this new asset has exceeded $2 billion, and it has experienced rapid growth. There was a subsequent controversy regarding the delisting of wBTC, and subsequently, the introduction of cbBTC.
Nevertheless, wBTC’s market capitalization and value continue to increase in spite of the legal dispute. Market capitalization for wBTC was $8 billion at the time of the August announcement of the new custody agreement.
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