Coinbase vs BiT Global in $1 Billion Wrapped Bitcoin Dispute

In November, Coinbase announced plans to delist Wrapped Bitcoin (wBTC) from its platform, citing undisclosed failures to meet its listing standards. This decision drew criticism from BiT Global Digital Limited, a Hong Kong-based crypto exchange and joint custodian of wBTC’s Bitcoin reserves alongside BitGo since August.

The Controversy Surrounding Coinbase’s Decision

BiT Global alleged that Coinbase’s move was intended to promote its own competing product, Coinbase Wrapped BTC (cbBTC), which launched on Sept. 12, and has since become one of the most popular Bitcoin wrappers, with about $1.4 billion in total value locked.

In response to the delisting, BiT Global filed a lawsuit against Coinbase on Dec. 13, seeking over $1 billion in damages. The lawsuit accuses Coinbase of anticompetitive behavior, including attempted monopolization of the wrapped Bitcoin market under the Sherman Act, predatory practices to undermine wBTC’s market position, and issuing false statements implying wBTC failed to meet listing standards.

Coinbase’s Response

Coinbase’s chief legal officer, Paul Grewal, defended the company’s actions a few days later, saying that assets failing to meet listing standards are delisted. However, BiT Global claims that Coinbase has been using its market power to favor cbBTC over wBTC, thereby undermining wBTC’s market position.

The Latest Developments

The case’s latest developments came on Dec. 17, after Coinbase filed a response to the lawsuit citing risks tied to crypto entrepreneur Justin Sun, including accusations of financial misconduct and regulatory investigations. The exchange’s response reinforced the idea that the token delisting was not due to technical reasons.

On X, users recalled that Coinbase itself has been under numerous investigations. On Dec. 18, a federal judge sided with Coinbase by refusing to issue a temporary restraining order to prevent the token delisting. Judge Araceli Martínez-Olguín said BiT Global’s legal team had failed to show ‘imminent irreparable harm’ in its arguments.

The Decision and Its Implications

The decision seems to be just the beginning of yet another legal battle. BiT Global has vowed to continue fighting for wBTC’s market position, while Coinbase remains committed to its stance on delisting assets that fail to meet listing standards.

Other News in the Crypto Space

Deutsche Bank Develops L2 Blockchain on Ethereum

Deutsche Bank, Germany’s largest lender, is reportedly developing its own layer-2 (L2) blockchain on Ethereum using ZKsync technology to address compliance challenges associated with using public blockchains in regulated finance.

The L2 solution, part of Project Dama 2, looks to improve transaction efficiency and secure regulatory safeguards, integrating directly with Ethereum. Project Dama 2 is an initiative of the Monetary Authority of Singapore’s Project Guardian, which brings together 24 financial institutions to explore blockchain-based asset tokenization.

Tether USDT Trading Continues Across Europe

Cryptocurrency exchanges in Europe are continuing to support Tether’s USDt stablecoin, even after Coinbase announced its delisting for European customers to comply with upcoming regulatory requirements. Top exchanges, including Binance, Crypto.com, and Kraken, have retained trading support for Tether’s USDt.

Kraken and BitGo to Help Distribute FTX Payments

Debtors representing the defunct cryptocurrency exchange FTX in its bankruptcy case have announced that a reorganization plan, which will enable customer repayments, will take effect on Jan. 3. In a Dec. 16 notice, FTX said it had set up a timeline for the initial distribution of funds to the exchange’s users.

According to the FTX debtors, the first group of claim holders can expect repayments within 60 days of Jan. 3, 2025, subject to certain conditions. The debtors said that crypto firms BitGo and Kraken would assist in distributing recoveries to FTX users.

BVNK Raises $50M to Expand into US Stablecoin Market

Stablecoin infrastructure company BVNK closed a $50 million Series B funding round led by Haun Ventures, with plans to expand into the United States. According to a Dec. 17 announcement, the fresh capital will be used to expand BVNK’s operations to San Francisco and New York City.

Based in London, BVNK is now estimated to be worth about $750 million. Its US offices will develop a local banking infrastructure and work on operational licenses to serve local companies.

Participants in the round included Coinbase Ventures, Scribble Ventures, DRW VC, and existing investors Avenir and Tiger Global.