Bit Global Strikes Back with $1 Billion Lawsuit Against Coinbase Over WBTC-Delisting

In a legal move, Bit Global has filed a $1 billion lawsuit against Coinbase, accusing the company of anti-competitive practices following the removal of Wrapped Bitcoin (WBTC) from its trading platform. The case was filed in the U.S. District Court for the Northern District of California, alleging that Coinbase is abusing its market dominance to promote its own product, cbBTC.

Coinbase Under Fire

Bit Global claims that Coinbase’s action violates both state and federal antitrust laws, undermining consumer choice and innovation in the crypto industry. The lawsuit alleges that Coinbase removed WBTC without providing any transparent reason, while aggressively promoting its own cbBTC. According to Bit Global, this was intended to undermine trust in WBTC and divert liquidity to their own product.

Timing and Strategy

Coinbase’s decision to delist WBTC in November 2024, just two months after the launch of cbBTC, has raised much suspicion. Bit Global accuses Coinbase of participating in a broader strategy to monopolize the wrapped Bitcoin market, leveraging their influence as a leading cryptocurrency exchange. The lawsuit emphasizes that Coinbase has not been able to clarify how WBTC did not meet the “listing standards”, while it continued to list speculative memecoins that have no fundamental value.

The Role of Wrapped Bitcoin

Wrapped Bitcoin (WBTC) is a tokenized version of Bitcoin (BTC) that is compatible with other blockchain networks such as Ethereum (ETH), and plays a crucial role in the DeFi ecosystem by allowing BTC holders to participate in DeFi platforms. With a market value of over $13 billion, WBTC is one of the most widely used wrapped Bitcoin products. According to Bit Global, Coinbase’s decision to delist WBTC restricts consumer accessibility and thus harms the broader crypto ecosystem.

Antitrust Parallels and FUD

The lawsuit draws parallels with historical antitrust cases and describes Coinbase’s actions as a typical example of dominant tech giants’ “copy-and-crush” tactics. Bit Global also accuses Coinbase of spreading misleading information about WBTC to sow doubt (FUD – fear, uncertainty, and doubt) and thereby strengthen the position of cbBTC as the primary wrapped Bitcoin token on their platform.

Bit Global calls for legal intervention to stop what they see as Coinbase’s unchecked expansion into adjacent markets. It states the following in the lawsuit:

“This lawsuit seeks to rectify this injustice and return choice to consumers. It aims to prevent another corporate giant from copying cryptocurrency applications developed by others, one by one, to incorporate them into itself.”

Response from Coinbase and Potential Impact

So far, Coinbase has not publicly responded to this lawsuit. However, this lawsuit could set a precedent for how centralized exchanges should balance their role as market regulator with fair competition and innovation.