Coinbase Global Inc., one of the largest cryptocurrency exchanges in the United States, is facing a $1 billion lawsuit following its decision to delist Wrapped Bitcoin (WBTC) from its platform earlier this year. The lawsuit, filed in the Northern District of California, accuses Coinbase of breach of contract, negligence, and causing significant financial losses for investors.
The plaintiff, Bit Global, claims that the delisting violated existing agreements and disrupted their trading strategies, resulting in substantial monetary damages. According to court documents, the delisting, announced on November 19, 2024, came without sufficient notice, leaving traders unable to liquidate or manage their WBTC holdings effectively.
Filed on December 13, part of the lawsuit read: “On November 19, 2024, roughly two months after announcing its cbBTC product, Coinbase announced on the X platform (formerly Twitter) that it would delist the wBTC cryptocurrency, effectively kicking its competitor off of the platform and depriving the market of the ability to trade wBTC. No written decision or reasoning was ever published or given to wBTC, and there is no process for wBTC to appeal against any decision.”
Coinbase Aims to Favour a Native Token with the Unscrupulous WBTC Delisting.
Additionally, the legal document asserts that Coinbase delisted wBTC to favor a competitor, cBTC. “Clearly, Coinbase has decided to exclusively promote its own wrapped Bitcoin product (cbBTC) on the Coinbase exchange. Coinbase’s plan to delist wBTC is clearly aimed to force its public cryptocurrency users who wish to use wrapped Bitcoin into using cbBTC, which is predatory and unfair competition that violates both federal and state law,” Bit Global alleged.
Driving its point further, Kneupper & Covey, Bit Global’s law firm representative, argued that within the window of delisting WBTC, Coinbase onboarded several meme coins with no intrinsic value. It added that listing the meme coins implies that the exchange decision did not stem from WBTC’s failure to meet trading standards on its platform.
At the time of press, Coinbase has not formally responded to the lawsuit but previously stated that the decision to delist WBTC was part of a strategic review of asset performance and market demand. It is left to see how events unfold.
