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A well-known cryptocurrency exchange firm might be forced to pay up to $1 billion in damages for delisting a digital currency from its platform.
The issuer of Wrapped Bitcoin, Bit Global Digital is suing crypto platform Coinbase for the losses incurred after the digital currency exchange removed its crypto token.
Lawsuit Against Coinbase
Coinbase is now facing a complaint filed by Bit Global Digital for the unfair delisting of Wrapped Bitcoin to gain an upper hand on the Wrapped Bitcoin market.
The Wrapped BTC issuer said that the delisting resulted in around $1 billion in losses, seeking damages from the crypto exchange for the unjust removal of the virtual token.
Bit Global Digital filed a complaint at the US District Court, Northern District of California for eight counts of violations which include attempted monopolization, unfair competition, and trade libel, claiming that Coinbase’s actions led to huge financial losses for the company and tainted the reputation of Wrapped BTC leading to consumers losing their confidence on the token.
Launching Of Coinbase’s New Asset
Bit Global Digital accused Coinbase of removing Wrapped Bitcoin to eliminate competition for its new asset, cbBTC, saying that cbBTC is a product that is directly competitive with wBTC.
The crypto exchange platform launched cbBTC in September 2024 and has been introduced on Ethereum, Base, and Solana.
In its complaint, the Wrapped BTC issuer said that two months after Coinbase introduced the new asset, the crypto exchange platform announced on X that it would suspend Wrapped BTC in the platform, saying that Coinbase effectively weed out its competitor from the platform and “depriving the market of the ability to trade wBTC.”
Bit Global Digital said that Coinbase did not provide any reasoning for delisting the crypto, adding that the crypto exchange failed to give them a chance to appeal the delisting.
“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 Digital stated in the complaint.
WBTC Did Not Meet The Standards
On November 19, Coinbase announced that it would discontinue the trading of Wrapped Bitcoin in the exchange platform on December 19 for allegedly not meeting the platform’s standards for listing tokens.
“We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent review, Coinbase will suspend trading for wBTC (wBTC) on Dec. 19, 2024, on or around 12 pm ET,” Coinbase said in an X post.
The crypto exchange did not elaborate on the standards that said cryptocurrency has failed to meet.
However, Bit Global Digital contradicted Coinbase’s claim, saying that “Coinbase has not publicly stated what listing standards wBTC does not meet.”
“Having decided to copycat wBTC with its own product, Coinbase resorted to unfair and deceptive tactics that long been used by tech giants to crush their competition,” the company argued in the complaint.
As of press time, Wrapped Bitcoin is traded at $101,355 with a market capitalization of over $13 billion.
Featured image from NPR, chart from TradingView
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