Coinbase has successfully fended off a restraining order sought by BiT Global as a California court ruled in favor of the exchange’s decision to delist Wrapped Bitcoin.
The Hong Kong-based company BiT Global is allegedly tied to crypto entrepreneur and TRON founder Justin Sun who had sought the order to prohibit Coinbase from removing Wrapped Bitcoin (wBTC), arguing it would inflict irreparable damage to its business. The ruling from U.S. District Judge Araceli Martínez-Olguín permits the delisting to move forward as scheduled.
As covered by crypto.news earlier, the American cryptocurrency exchange giant Coinbase revealed on Nov. 19 that it would delist wBTC from its platform on Dec. 19. The decision came as a result of Coinbase’s regular review process, which BiT Global alleged was biased. The firm subsequently filed a lawsuit alleging violations of competition laws and libel, claiming the exchange damaged wBTC’s reputation by promoting its own tokenized Bitcoin product, cbBTC.
Coinbase, as a private company, defended its decision. A spokesman for the exchange rejected the allegations, saying that they have the right to decide whether to list or delist a token. The company further denied accusations of monopolistic behavior, saying it represented less than 1 percent of all wBTC trading activity. cbBTC has taken off since its Sept. launch, with a market cap exceeding $2.11 billion.
BiT Global also asserted Justin Sun, the firm’s adviser, had been wrongly involved in the scandal. Still, Coinbase pointed to Sun’s previous accusations of financial misconduct and argued that his distancing from wBTC was a strategic decision. Coinbase’s legal counsel characterized the suit as frivolous and suggested sanctions could be imposed against both BiT Global and its counsel. They pointed to a failure of evidence to support claims that Coinbase’s actions had caused users to abandon wBTC.
BiT Global also claimed that wBTC is crucial to the crypto ecosystem and defended their stance by accusing Coinbase of impartial listing policies and accusing the exchange of listing meme coins such as Mogcoin (MOG) and pepe (PEPE) that serve little purpose.
However, many crypto enthusiasts are siding with BiT Global saying Coinbase’s decision to delist wBTC is because they “don’t like Justin Sun”. Critics further argued that wBTC is more acceptable than cbBTC does not provide proof of reserves, unlike its competitor. A token requires proof of reserves to prove an issuer possesses enough assets to back the token and to expand transparency and trust. For wrapped tokens such as wBTC or cbBTC, it shows that each token is actually 1:1 backed by the original asset, in this case, Bitcoin (BTC). The absence of proof of reserves, on the other hand, puts each user at an increased risk of insolvency, fraud, or mismanagement by the issuer.
