Coinbase has prevailed against a restraining order sought by BiT Global as a California court ruled in its favor regarding the decision to delist Wrapped Bitcoin (wBTC). BiT Global, which is allegedly linked to crypto entrepreneur Justin Sun, had requested the order to prevent Coinbase from removing wBTC, arguing it would cause “irreparable” harm to its business.
However, U.S. District Judge Araceli Martínez-Olguín’s ruling permits the delisting to proceed as planned, with the court stating that “self-inflicted wounds are not irreparable injury,” indicating that BiT Global’s claimed injury resulted from its own actions rather than Coinbase’s delisting.
Previously, on Nov. 19, Coinbase announced it would delist wBTC from its platform on Dec. 19 as part of its regular review process. BiT Global alleged bias in this process and filed a lawsuit, claiming violations of competition laws and libel. It asserted that Coinbase damaged wBTC’s reputation by promoting its own tokenized Bitcoin product, cbBTC. Coinbase’s legal team dismissed the suit as frivolous and suggested sanctions against BiT Global and its counsel, citing a lack of evidence that Coinbase’s actions led users to abandon wBTC.
Coinbase, as a private company, defended its right to decide on token listings and delistings and denied accusations of monopolistic behavior, noting it accounted for less than one percent of all wBTC trading activity. Meanwhile, cbBTC has seen success since its September launch, with a market cap over $2.11 billion.
BiT Global also claimed that Justin Sun, its adviser, had been wrongly implicated in the situation. Coinbase, however, pointed to Sun’s past accusations of financial misconduct and suggested his detachment from wBTC was strategic. BiT Global argued that wBTC is vital to the crypto ecosystem and accused Coinbase of having unfair listing policies and listing meme coins like Mogcoin and Pepe that lack significant purpose.
Many crypto enthusiasts are siding with BiT Global, suggesting Coinbase’s delisting decision is due to its dislike of Justin Sun. Critics also contended that wBTC is more acceptable than cbBTC as cbBTC does not provide proof of reserves. For wrapped tokens like wBTC and cbBTC, proof of reserves is crucial to show 1:1 backing by the original asset (Bitcoin) and enhance transparency and trust. The lack of such proof increases the risk of insolvency, fraud, or mismanagement for users.
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