Coinbase, the renowned cryptocurrency exchange, is confronting a legal ordeal, as BiT Global sues them for over a hefty sum of $1 billion. BiT Global Digital Limited alleges that Coinbase intentionally sabotaged the market for a digital token called Wrapped Bitcoin (wBTC) after they made the decision to pull the plug on the token in November.
According to a complaint by BiT Global on December 13th, they state that Coinbase’s move to eradicate wBTC was aimed at paving the way for the promotion of their own comparable product called cbBTC. Consequently, this resulted in substantial financial loss along with the erosion of customer faith in wBTC.
Allegations covered in this lawsuit involves claimed attempts by Coinbase for monopolization of the Wrapped Bitcoin market under the Sherman Act, assertions of destructive practices to destabilize wBTC’s market stance, and accusations of false declarations hinting that wBTC did not meet listing norms. In November, Coinbase had announced the delisting of this token, referring vaguely to its failure to meet listing standards.
BiT Global is a cryptocurrency exchange headquartered in Hong Kong. Since August, the firm has been jointly responsible for the Bitcoin reserves of wBTC along with the cryptocurrency firm, BitGo. The lawsuit was instituted by law firm Kneupper & Covey in the Northern District of California.
Counselors for BiT Global have accused Coinbase of incorporating memecoins – a type of cryptocurrency known for its volatility – for trading on its platform, while simultaneously questioning the compliance of wBTC with listing standards, subsequent to the release of a similar product.
The lawsuit is seeking damages well over $1 billion with the inclusion of requests for injunctive relief in a bid to halt further harm. The primary reason behind the lawsuit, as per a BiT Global spokesperson, is Coinbase’s scheming to gain a competitive edge by propagating their own wrapped Bitcoin product, cbBTC, and subsequently eliminating wBTC, their main and most influential contender.