Coinbase fights back against BiT Globals effort to block WBTC delisting
Coinbase pushed back against BiT Globals legal attempt to halt its planned delisting of wrapped Bitcoin (WBTC), arguing that the lawsuit lacks merit and the firms request for a temporary restraining order (TRO) should be denied.
According to court filings, Coinbase decided to delist WBTC due to concerns about risks stemming from its association with TRON founder Justin Sun and the lack of clarity about the tokens reserves.
Coinbase chief legal officer Paul Grewal said the filing is a response to BiTs bogus lawsuit. He added:
We lay out why this lawsuit lacks any semblance of merit and why their request for a TRO should be denied.
Concerns about Sun
In a court filing submitted to the US District Court for the Northern District of California, Coinbase detailed its months-long internal review process that led to the delisting decision.
The exchange cited Suns widely publicized history of alleged fraud and market manipulation, combined with BiTs failure to provide transparency on its ownership structure, as presenting an unacceptable risk to Coinbases platform and its users.
Coinbase cited Suns allegedly long history of alleged fraud and market manipulation as posing an unacceptable risk to its platform and customers. The company added that BiT failed to address Coinbases questions about the ultimate ownership of WBTC reserves, exacerbating its concerns.
According to the filing:
BiT seeks to force Coinbase to do business with an entity that no longer complies with Coinbases standards due to Mr. Suns material[] involve[meant].'
The exchange further claimed that its decision aligns with its responsibility to protect platform integrity and customer confidence, citing past instances where assets were delisted for similar reasons.
Delisting damages
BiT Global, the plaintiff in the case, has accused Coinbase of unfairly delisting wBTC to promote its own competing asset, cbBTC. The firm further claims the decision will cause significant reputational and financial harm.
In its motion, BiT argued that the delisting could erode consumer trust in WBTC and limit access to a critical trading platform. It further described Coinbases delisting as a signal to the digital asset community that WBTC is less trustworthy than other tokens, a move it contends violates Californias Unfair Competition Law.
However, Coinbase countered that less than 1% of global WBTC transactions occur on its platform, dismissing BiTs claims of irreparable harm. It also pointed to declining WBTC circulation before its delisting announcement, which it attributed to Suns involvement.
Coinbase also dismissed BiTs assertions that the delisting would harm the broader public interest. It argued that wBTC holders still retain multiple avenues to trade the token on other platforms and can store or transfer their holdings using Coinbase Wallet, a separate decentralized application.
The case highlights mounting scrutiny over Suns influence in the crypto space. Sun has faced lawsuits from the Securities and Exchange Commission (SEC) and is reportedly under investigation for potential criminal misconduct.
A hearing on BiTs TRO request is scheduled for Dec. 18. If granted, it would temporarily delay Coinbases delisting of wBTC, currently set for Dec. 19.
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Text source: CryptoSlate
