Coinbase has firmly rejected BiT Global’s $1 billion lawsuit over the delisting of wrapped Bitcoin (wBTC), emphasizing that its actions were justified to maintain platform integrity and protect users from risks associated with Justin Sun’s involvement.

The Lawsuit: BiT Global’s Claims

Accusations of antitrust violations and harm

BiT Global, linked to Justin Sun, filed a lawsuit on December 13, accusing Coinbase of:

• Illegally delisting wBTC, causing harm to its token economy.
• Favoring its own tokenized Bitcoin product, cbBTC, in violation of antitrust laws.
• Hosting less serious assets, such as meme coins, while removing wBTC.

The lawsuit seeks $1 billion in damages and a temporary restraining order to halt the delisting.

Coinbase’s Defense

Protecting users and platform integrity

In its December 17 court filing, Coinbase argued:

• It is not legally obligated to list wBTC or transact with parties tied to questionable actors.
• The decision to delist wBTC followed a “careful review” that identified unacceptable risks due to Justin Sun’s majority control over wBTC reserves.
• BiT Global’s claim of irreparable harm is unfounded, as less than 1% of wBTC transactions occur on Coinbase.

The exchange stated:
“Coinbase does not have anything approaching monopoly power… and the decision to delist wBTC was proper and justified.”

Concerns Over Justin Sun’s Involvement

Red flags and regulatory scrutiny

Coinbase highlighted multiple concerns tied to Justin Sun, including:

• Sun’s alleged involvement in federal violations per SEC charges.
• An FBI investigation into potential terror financing.

Although no formal indictments or arrest warrants have been issued against Sun, these developments influenced Coinbase’s risk assessments. The company labeled its decision as “common sense” to safeguard its users and platform.

Broader Market Impact

Minimal effect on wBTC’s ecosystem

Coinbase emphasized that wBTC’s on-chain activity primarily occurs outside its platform, minimizing the token’s dependency on Coinbase for liquidity. The delisting, it argued, does not significantly impact wBTC’s overall functionality or market presence.

Coinbase’s Stance on the Suit

Request for dismissal

Coinbase has requested the California court to dismiss BiT Global’s claims, stating the lawsuit lacks urgency and substance. The exchange further argued that BiT’s delay in filing contradicts its claims of an emergency regarding wBTC.