Coinbase Wins Legal Battle Over wBTC Delisting

Coinbase and BiT Global have reached a legal settlement that ended their dispute over the delisting of BiT Global’s wrapped bitcoin (wBTC) token on Coinbase. According to a joint court filing, BiT Global has agreed to dismiss its lawsuit against the crypto exchange with prejudice, meaning the case cannot be brought again in the future. The filing notes that both companies will cover their own legal expenses.

BiT Global had filed the lawsuit last year in the Northern District of California after Coinbase delisted the token over what it said was “unacceptable risk” that the tokenized BTC would “fall into the hands of Justin Sun.” Sun became affiliated with wBTC in August last year through a partnership, prompting Coinbase to question BiT Global about his role. Sun, a Chinese-born crypto billionaire, has nevertheless been supporting the token, with World Liberty Financial dropping its cbBTC for wBTC after he joined as an advisor.

The suit alleged the exchange’s decision was unjustified and harmed the token's liquidity and reputation while favoring Coinbase’s competing asset cbBTC. Coinbase launched cbBTC just two months before announcing it was delisting wBTC. The dismissal does not disclose any settlement terms beyond the cost arrangement.

Coinbase and BiT Global Digital Ltd. have concluded their legal dispute over the delisting of Wrapped Bitcoin (wBTC) from the cryptocurrency exchange. The resolution came after a San Francisco federal court ruling, which denied the issuance of a temporary restraining order to halt the delisting of wBTC. This decision followed a judicial warning during oral arguments on a motion to dismiss the case, where U.S. District Judge Araceli Martínez-Olguín indicated her inclination to dismiss the case.

BiT Global Digital Ltd. had filed an antitrust and unfair competition lawsuit against Coinbase, alleging that the delisting of wBTC was unjustified and harmful to its interests. However, the court's ruling and the subsequent dismissal of the lawsuit with prejudice marked a significant victory for Coinbase. The chief legal officer for Coinbase, Paul Grewal, emphasized the importance of this outcome, stating that it affirms Coinbase's right to manage security and risk for its users. Grewal highlighted that Coinbase's actions were driven by regulatory concerns tied to Justin Sun’s alleged influence, underscoring the exchange's commitment to maintaining a secure and compliant platform.

The legal battle had been ongoing for some time, with BiT Global and its counsel, Kevin Kneupper and A. Cyclone Covey, partners at Kneupper & Covey in Huntington Beach, California, initially expressing their intentions to pursue the case through trial. However, the court's decision and the subsequent dismissal of the lawsuit brought an end to the legal dispute. This resolution allows Coinbase to continue its operations without the legal challenges posed by the delisting of wBTC, reinforcing its position as a leading cryptocurrency exchange committed to regulatory compliance and user security.