BiT Global has filed a lawsuit against Coinbase, the largest crypto trading platform in the United States, according to a Dec. 13 court filing.
The Justin Sun-linked crypto custodian alleged that the US exchange unfairly removed wrapped Bitcoin (WBTC) from its platform to favor its in-house product, Coinbase Wrapped Bitcoin (cbBTC).
Antitrust violations
According to the court filing, Coinbase is leveraging its dominance in the crypto market to suppress competition. BiT Global accused the exchange of violating antitrust laws by replacing WBTC with cbBTC to establish control over the wrapped Bitcoin market.
The complaint noted that Coinbase’s actions are not only anti-competitive but strategically aimed at increasing its transaction revenues because transaction fees on its platform are expected to rise as cbBTC gains traction.
The filing furthered:
“On information and belief, Coinbase used this language—that it would not charge wrapping/unwrapping fees ‘today’—because it plans to do so once it has unfairly eliminated the competition.”
BiT Global disputed Coinbase’s claim that WBTC was removed due to “listing standards,” citing the exchange’s recent inclusion of meme coins like PEPE and MOG as evidence.
According to the filing, these actions reveal that the delisting was not about quality but rather an attempt to capture WBTC’s market position. It added:
“The decision to allow users to trade these memecoins makes clear that Coinbase did not delist WBTC because of any listing standard, but because Coinbase coveted WBTC’s market share and wanted it for itself.”
Through this lawsuit, BiT Global seeks to restore competition and prevent further centralization of power. The firm aims to halt the delisting of WBTC and protect decentralized innovation in the crypto space.
The wrapped Bitcoin market
Coinbase’s decision to delist wBTC comes after a turbulent year for the asset. BiT Global became a key custodian for WBTC this year, following BitGo’s move to distribute custody control to multiple entities, including the Hong Kong-based firm.
This shift sparked concerns within the DeFi community due to Justin Sun’s connection to the crypto custodian, prompting MakerDAO and Aave to reconsider WBTC as a collateral asset.
While these DeFi protocols ultimately retained WBTC, the developments raised questions about its long-term stability. In response to these challenges, several firms, including Coinbase, launched their own wrapped Bitcoin products.
However, Coinbase’s cbBTC has quickly gained momentum to become the second-largest wrapped Bitcoin product behind WBTC. The token was deployed on Ethereum and its Layer 2 network Base in September and currently has a market capitalization of around $2 billion.
On the other hand, WBTC, despite being among the top 20 cryptocurrencies with a $13.7 billion market cap, has seen its token supply shrink by over 20,000 BTC due to ongoing challenges.
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