In brief
- BiT Global has agreed to dismiss a lawsuit against Coinbase over its delisting of Wrapped Bitcoin (WBTC).
- BiT Global, which has ties to crypto founder Justin Sun, sued when Coinbase said it would no longer list WBTC following BiT Global’s plans to become involved with the token.
- Since delisting WBTC, Coinbase’s own wrapped Bitcoin product, cbBTC, has steadily gained market share.
Digital asset custodian BiT Global has agreed to permanently dismiss a lawsuit against Coinbase over the crypto exchange’s delisting of Wrapped Bitcoin, aka WBTC, one of the world’s most popular tokens.
Both parties agreed Friday to dismiss BiT Global’s suit with prejudice, meaning the matter cannot be litigated in the future. Each party will cover their own legal fees, according to the filing.
BiT Global sued Coinbase in December for delisting WBTC, or Wrapped Bitcoin—a popular digital asset that allows traders on Ethereum to utilize and gain exposure to the world’s top cryptocurrency, which is by its nature incompatible with other blockchain networks. The token is backed by one-to-one reserves of Bitcoin.
Though many such wrapped Bitcoin tokens exist, WBTC is handily the market leader. The token boasts a market capitalization of $13.88 billion, making it, at writing, the 12th-largest crypto token in the world.
In August, BitGo, WBTC’s chief custodian, announced it was teaming with BiT Global, a Hong Kong-based custodian, to diversify “custodial jurisdictions and locations for the underlying Bitcoin” held to back WBTC. The token’s reserves were previously held entirely in the United States.
The announcement attracted plenty of pushback in crypto, given BiT Global’s extensive ties to controversial crypto entrepreneur Justin Sun. At the time, some crypto leaders argued Sun’s involvement posed an “unacceptable level of risk” to WBTC’s stability and trustworthiness.
Days later, Coinbase teased plans to launch its own WBTC competitor, dubbed cbBTC. It then delisted WBTC from its exchange in December, stating in November that the token no longer met its “listing standards.”
Weeks later, BiT Global hit Coinbase with a lawsuit, arguing the delisting was a predatory “cash grab” motivated by the exchange’s desire to increase cbBTC’s value by suppressing its chief competitor. Coinbase countered that the move was instead motivated by a desire to protect customers from the “unacceptable risk that control of WBTC would fall into the hands of Justin Sun.”
A federal judge shortly thereafter denied BiT Global’s request to halt the delisting, stating there was insufficient evidence that the move would cause imminent and irreparable harm to the crypto custodian.
BiT Global did not immediately respond to Decrypt’s request for comment when asked why it moved to dismiss the lawsuit. Last month, however, a federal judge in San Francisco overseeing the case told both parties she was inclined to grant Coinbase’s motion to dismiss the case “in its entirety,” according to court transcripts seen by Decrypt.
Coinbase Chief Legal Officer Paul Grewal told Decrypt on Monday that as of now, the exchange has “zero plans” to relist WBTC.
Since delisting WBTC, Coinbase has seen its position in the wrapped Bitcoin sector grow substantially. Since the December delisting, when Bitcoin’s price was nearly the same as today’s, cbBTC has more than tripled in market capitalization, to $4.84 billion at writing.
Edited by Andrew Hayward
Editor’s note: This story was updated after publication to include a new comment from Grewal along with additional context.
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