Asset custody firm BiT Global has sued the American crypto exchange Coinbase, alleging anti-competitive practices. The lawsuit, filed in the Northern District of California by law firm Kneupper & Covey, seeks over $1 billion in damages.
The wrapped Bitcoin (WBTC) custodian alleges that Coinbase’s decision to remove the token from its exchange was motivated by a desire to promote its rival product, cbBTC.
Wrapped Bitcoin products, such as WBTC and cbBTC, allow users to unlock value in Bitcoin for use on other networks, such as Ethereum and Base. The user wraps their asset by depositing it into the wallet of a trusted custodian and subsequently receives a token on another blockchain. The original crypto is then held in trust for the user.
Bit Global Sues Coinbase
The lawsuit further alleged that Coinbase’s decision violates numerous state and federal laws, including antitrust laws. BiT Global argued that the exchange’s actions are anti-competitive and designed to stifle innovation in the crypto industry.
Claiming that the case could have industry-wide implications, BiT Global’s attorney Kevin Kneupper said:
“If an exchange of Coinbase’s size can delist a cryptocurrency just as it plans to launch its own competing product, who’s safe? And who’s next?”
Meanwhile, Coinbase publicly promoted cbBTC as “super strategic” and predicted it would surpass wBTC in supply within six months of launch. Citing this, the lawsuit alleged that Coinbase is attempting to push wBTC out of the United States crypto market to make way for its competing product, cbBTC. Interestingly, it’s been only three months since the token’s inception.
The asset custody firm plans to pursue the lawsuit and seek damages over $1 billion. Commenting on this, Kneupper continued:
“We think a jury will see this for exactly what it is…We plan to make sure the law is followed, and that cryptocurrency users get to choose which product they prefer.”
Coinbase Plays Defensive
According to Coinbase, the decision was not motivated by a desire to promote its competing product, cbBTC, as alleged by its opponent. Instead, the exchange claims the delisting resulted from a standard review process. However, BiT Global fired back, citing the exchange’s recent onboarding of various memecoins lacking fundamental value.
The American exchange recently announced plans to delist Tether’s USDT stablecoin from its platform for European customers, citing compliance with the European Union’s Markets in Crypto-Assets Regulation (MiCA).
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