- Coinbase has opposed an emergency motion to halt its decision to delist wrapped Bitcoin (wBTC) due to risks tied to Justin Sun’s involvement
- Bit Global Digital Limited alleges reputational harm and antitrust violations but delayed seeking emergency relief, undermining claims of irreparable harm
- Coinbase has defended its actions as consistent with established listing standards and necessary to protect users from potential risks
Coinbase has strongly opposed a motion by BitGlobal to prevent the delisting of wrapped Bitcoin (wBTC) from its platform, citing the risks posed by the involvement of Justin Sun in wBTC’s governance. In a response filing, Coinbase justified its actions as part of its rigorous compliance process, emphasizing its responsibility to protect customers and platform integrity. In its reply to BitGlobal’s motion, Coinbase pointed to the allegations of fraud and regulatory violations of which Sun has been accused as part of its decision.
Coinbase and Bit Global Clash Over Wrapped Bitcoin
wBTC was delisted in November by Coinbase following a review triggered by the announcement of a partnership between BitGlobal, Sun, and crypto custodian BitGo. Sun, a controversial figure in the crypto space, has faced allegations of fraud and regulatory violations, leading to Coinbase making a bold decision:
Coinbase made the decision—based on a rigorous internal process—that wBTC should be delisted from Coinbase’s exchange due to the unacceptable risk that control of wBTC would fall into the hands of Justin Sun.
BitGlobal claims that the delisting harms its reputation and constitutes unfair competition, accusing Coinbase of seeking to unfairly promote its own wrapped Bitcoin product, cbBTC. However, BitGlobal delayed filing its lawsuit until just days before the delisting’s implementation, a move Coinbase described as BitGlobal “manufacturing an “emergency” in order to force it to continue listing wBTC.
“No Law” Supports BitGlobal’s Claim
Coinbase argues that the delisting aligns with its rigorous asset evaluation standards, noting, “Coinbase’s decision reflects our ongoing commitment to platform integrity and user security.” It pointed to BiT’s refusal to clarify Sun’s involvement as a factor in determining risk and emphasized that trading wBTC represents less than 1% of its volume, and the asset remains available on other platforms.
The case hinges on whether Coinbase’s actions violate California’s Unfair Competition Law and antitrust statutes. Coinbase has countered that “no law” mandates hosting assets that fail its listing standards, adding that Courts have previously upheld the rights of tech platforms to make decisions in users’ best interests, citing public safety and regulatory compliance.
This case underscores the evolving challenges in regulating cryptocurrencies and balancing competitive concerns with platform security. A decision could set a precedent for how exchanges manage assets linked to high-risk individuals.
