Justin Sun Confronts Coinbase CLO on wBTC Delisting and $1B Legal Battle

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As a seasoned crypto investor with years of experience navigating the volatile and often unpredictable world of digital currencies, I find myself intrigued by the ongoing tussle between Justin Sun and Coinbase over the delisting of wBTC. Having witnessed firsthand the rise and fall of countless cryptocurrencies, I’ve learned to read between the lines when it comes to such disputes.

Tron founder Justin Sun has recently confronted Coinbase CLO Paul Grewal in a discussion over the delisting of wBTC from crypto exchange Coinbase. The news caught fire when Justin Sun’s BiT Global, which recently took a major stake in the wBTC ecosystem, slapped a lawsuit on Coinbase for the delisting of wrapped Bitcoin.

Justin Sun Questions Coinbase on wBTC Delisting

Justin Sun’s BiT Global is preparing to take legal action against crypto exchange Coinbase, due to Coinbase choosing to withdraw the trading of Wrapped Bitcoin (wBTC) in favor of introducing a competing product, cBTC, back in September. On November 19, Coinbase announced its intention to remove Wrapped Bitcoin (WBTC) from their platform, effective December 19, 2024, stating that this decision was part of a regular assessment of their listing criteria.

In a notable development, the delisting of the largest tokenized form of Bitcoin, specifically wBTC, has caused quite a stir. Earlier this year, custody rights for WBTC were taken over by Bit Global Trust. Now, it claims that Coinbase isn’t adhering to its “fair” listing standards and is removing wBTC as part of an effort to minimize competition for its newly launched cBTC.

Law office Kneupper & Covey, acting on behalf of BiT Global, has initiated a legal action against Coinbase, asserting that the company’s move to remove Wrapped Bitcoin (WBTC) from its platform is uncompetitive and breaks several state and federal regulations. The lawsuit argues that this action will result in substantial damage to BiT Global, having just taken on custodial duties for WBTC under a recent agreement. In a statement released last Friday, attorney Kevin Kneupper stated:

“We believe this decision sets a terrible precedent for everyone in the cryptocurrency space. 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?”

Paul Grewal, Coinbase’s Chief Legal Officer, has explained their actions by stating: “If an asset no longer aligns with our listing criteria, we remove it. If another asset can meet or surpass market requirements without compromising those standards, we list it. We appreciate Bit Global for enabling us to demonstrate this in a U.S. federal court and on the worldwide crypto platform.

In response to this, Justin Sun referenced a past comment by Armstrong from 2021: “We don’t express an opinion on the value of each asset because we believe in free markets and aren’t biased towards any particular asset.” Sun then told Grewal that his views differ from those of Coinbase’s founder.

 Listing “Valueless” Meme Coins?

The law firm representing BiT Global stated that Coinbase has recently listed several “fundamentally valueless” memecoins, yet has now deemed Wrapped Bitcoin (WBTC) as failing to meet its standards. The recent one includes the listing of Peanut the Squirrel (PNUT). It added:

As a crypto investor, I found myself in a situation where the worth of wBTC had been convincingly established. However, just after introducing their own version, cbBTC, Coinbase decided to alter their platform’s rules, removing wBTC from tradeability on their platform. This move was made shortly following the launch of cbBTC.

As a researcher in the field, come September 2024, I was particularly intrigued by the introduction of cbBTC on Ethereum and its Layer 2 network, Base. Since its debut, cbBTC has steadily grown to become the second-largest representation of Bitcoin in the tokenized form, boasting a market cap that surpasses the $2 billion mark.

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2024-12-14 16:16