Crypto Exchange Coinbase Cites Justin Sun-Linked Risks During Lawsuit Over Wrapped Bitcoin (wBTC) Delisting

In a recent complaint, the wBTC custodian and Sun-affiliated BiT Global accused Coinbase of using wBTC – the tokenized representation of Bitcoin (BTC)

Crypto exchange Coinbase is highlighting the risks linked to Tron founder Justin Sun in a lawsuit over its decision to delist Wrapped Bitcoin (wBTC).

In a recent complaint, the wBTC custodian and Sun-affiliated BiT Global accused Coinbase of using wBTC – a tokenized representation of Bitcoin (BTC) on the Ethereum (ETH) blockchain – as a “cash grab” before ultimately delisting it and replacing it with its own version of the asset.

"In the case of wrapped Bitcoin, Coinbase viewed it as just another cash grab," the complaint alleges. "It saw a competitor, wBTC, that had something it wanted: an innovative product that released value inherent in Bitcoin and let users utilize that value in bold new ways."

The complaint continues, "Coinbase decided it would take what it wanted. Once the value in wBTC had been demonstrated, Coinbase changed the rules, delisting wBTC from its platform so that it could no longer be traded on the Coinbase platform – and it did so shortly after launching its own knock-off clone called cbBTC."

In response to the complaint, Coinbase says it made the decision to delist wBTC largely because of its links to Justin Sun and the risks that would arise if he had any influence over it. The exchange points out that Sun's name is conspicuously absent from BiT's complaint.

"Coinbase made the decision—based on a rigorous internal process—that wBTC should be delisted from Coinbase’s exchange due to the unacceptable risk that control of wBTC would fall into the hands of Justin Sun," Coinbase states in its response. "BiT now asks the Court to override, on an emergency basis no less, Coinbase’s judgment that continuing to list wBTC could compromise the integrity of its platform and put customers at risk."

Coinbase adds, "BiT seeks to force Coinbase to do business with an entity that no longer complies with Coinbase’s standards due to Mr. Sun's ‘material involvement.’ And yet, Mr. Sun’s name and connection to wBTC is conspicuously absent from BiT’s Complaint and TRO (temporary restraining order) request."

"So too is any acknowledgment that he has repeatedly been accused of, investigated for, and sued for financial misconduct, and that reports of his alleged misdeeds abound in the press and crypto community more broadly."

Coinbase also alleges that Sun is "infamous" in the crypto community and that he has been accused of several wrongdoings, including market manipulation and misappropriation of digital assets.