Coinbase Rejects BiT Global's $1B Lawsuit, Says No Law Compels It to Do Business with Justin Sun-Tied Exchange

Coinbase asked a U.S. court to deny BiT Global's lawsuit in Northern California, which seeks $1 billion in relief and a temporary restraining order

Crypto exchange Coinbase has asked a U.S. court to dismiss a $1 billion lawsuit filed by Justin Sun-affiliated exchange BiT Global over its plan to delist wrapped Bitcoin (wBTC).

A Dec. 13 legal complaint from BiT Global accused Coinbase of planning to illegally remove wBTC from its U.S.-based exchange without providing sufficient notice. The exchange also claimed the move would cause “irreparable harm” to the token’s economics.

The legal filing further alleged that Coinbase’s decision to launch its own tokenized Bitcoin asset, cbBTC, while delisting wBTC, breached antitrust laws and threatened to create a Coinbase-controlled monopoly in the tokenized Bitcoin marketplace.

Coinbase hit back at the claims on Dec. 17, stating that California’s Unfair Competition Law is inapplicable to the case, and that DeFi Llama data shows that cbBTC is ranked outside the top 10 tokenized BTC assets by market capitalization.

“Coinbase has the right to choose whom to do business with, and no law requires it to allow bad actors or suspected bad actors onto its exchange,” Coinbase argued in the court filing.

“Coinbase does not have anything approaching monopoly power, and because its decision to delist wBTC was proper and justified based on the careful review it undertook and the unacceptable risk of doing business with an entity associated with Mr. Sun.”

The crypto exchange also highlighted that material changes to wBTC’s stewardship, particularly concerning Justin Sun, prompted Coinbase and other entities to reconsider their support for the asset.

The filing states that the Bitcoin reserves are now “largely controlled” by Sun following the acquisition of key wBTC custodian BitGo by the Sun-founded crypto firm PKT earlier this year.

The development prompted the U.S. Securities and Exchange Commission to charge Sun and three of his wholly owned companies with federal violations in early December. The charges allege that Sun misled investors in a 2017 initial coin offering for Tron (TRX).

“These new risk assessments, which are conducted in accordance with Coinbase’s listing standards, raised red flags primarily due to Mr. Sun,” Coinbase stated.

“This assessment is a matter of common sense and is necessary to protect Coinbase’s customers. Delisting wBTC from Coinbase will also have a de minimis impact on the token’s overall on-chain activity, which largely takes place on other platforms.”

Coinbase added that its decision to remove wBTC from its exchange will not largely impact the token’s overall activity, as less than 1% of transactions involving wBTC are processed on the crypto bourse.

“Nor can BiT claim harm, let alone irreparable harm, from being delisted from an exchange where less than 1% of transactions involving wBTC are made,” the exchange stated.

“Perhaps that is why BiT sat on its claims for nearly a month before filing suit, belying any urgency for relief.”

The crypto titan is asking the California court to rule against BiT Global’s request for a temporary restraining order to block the wBTC delisting and its demand for a $1 billion relief package, due to the firm’s ties to an allegedly indictable individual and fabricated emergency regarding wBTC.