Cryptocurrency exchange Coinbase is facing a massive $1 billion lawsuit from BiT Global Digital Limited over its decision to delist wrapped bitcoin (wBTC) from its platform.
The lawsuit, filed on December 13 in California's Northern District Court by law firm Kneupper & Covey, alleges that Coinbase deliberately removed wBTC to boost its own competing product, cbBTC.
BiT Global claims Coinbase engaged in unfair business practices and market manipulation when it announced the delisting of wBTC on November 19, citing unspecified issues with the token. The Hong Kong-based exchange, which manages bitcoin reserves for wBTC alongside BitGo, argues this move caused substantial financial damage and eroded market confidence in wBTC.
The legal challenge highlights growing tensions in the tokenized Bitcoin market. According to court documents, Coinbase's decision came shortly after launching its own cbBTC token on its Base network and Ethereum in September, amid ongoing discussions about wBTC's oversight.
BiT Global's legal team points out that while Coinbase questioned wBTC's compliance with listing standards, the exchange continues to list various meme coins on its platform. The lawsuit seeks both monetary damages exceeding $1 billion and an injunction against Coinbase.
"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?" stated attorney Kevin Kneupper, highlighting concerns about the precedent this case might set for the cryptocurrency industry.
Despite the controversy, wBTC maintains its position as the leading tokenized Bitcoin asset, with a market value of $13.7 billion.