Coinbase justified delisting WBTC to protect its platform from risks tied to Justin Sun‘s involvement, triggering a $1 billion lawsuit from Bit Global.
Coinbase defended its decision in a court brief filed on Tuesday, saying it was a necessary step to protect its clients and the integrity of its platform from the possible risks associated with Justin Sun’s affiliation with WBTC.
The legal battle began when Coinbase declared on November 19, 2024, that it would terminate WBTC, a Bitgo-created currency backed by bitcoin (BTC).
WBTC Delisting
Bit Global, which just joined Bitgo’s WBTC operations, is furious and claims that Coinbase’s decision has damaged their brand and severely damaged their profits.
As a result, they are demanding an urgent relisting and an enormous $1 billion in damages. Coinbase defended the company by stating that its internal checks aroused concerns following Bitgo’s announcement in August 2024 of a joint venture with Bit Global, which is connected to Justin Sun of Tron.
The document is straightforward, outlining Sun’s ongoing legal disputes and charges against him. Coinbase cited a Securities and Exchange Commission (SEC) complaint that is now pending against Sun and rumors of criminal investigations as reasons to be concerned.
In addition to asserting that Bit Global sidestepped inquiries regarding its ownership structure during the assessment, Coinbase stated that “continuing to list WBTC could compromise the integrity of its platform and put customers at risk.”
According to Coinbase’s defense, the company has requested clarity on Sun’s influence over Bit Global on numerous occasions but has received little in return. According to the court document, Coinbase remained steadfast in its adherence to strict listing regulations.
According to the exchange, it eliminates assets that don’t meet standards in order to protect its clients. According to the petition, “Coinbase monitors listed assets and delists those that do not comply with its publicly announced listing standards in order to earn and maintain user trust in its exchange.”
Additionally, the exchange dismissed Bit Global’s claims of financial harm, pointing out that less than 1% of all WBTC trades globally occur on Coinbase.