tl;dr
A federal judge denied BiT Global’s request for a temporary restraining order, stating that the firm failed to demonstrate imminent and irreparable harm from Coinbase’s plans to delist WBTC (Wrapped Bitcoin). BiT Global had sued Coinbase, alleging unfair business practices. Coinbase defended its dec...
BiT Global vs. Coinbase: The Battle Over WBTC Delisting A federal judge denied BiT Global’s request for a temporary restraining order, finding no evidence of imminent and irreparable harm from Coinbase’s delisting of WBTC. Coinbase defended its decision to delist WBTC, citing concerns about control falling into the hands of Justin Sun, co-founder of Tron, and highlighting the low trading volume of WBTC on its platform. The dispute centers on the delisting of wrapped Bitcoin, commonly used in decentralized finance, with BitGo and BiT Global collaborating to diversify WBTC’s backing in a multi-jurisdictional way. BiT Global's CEO expressed dismay over increasing scrutiny and described it as a targeted campaign aiming to destroy the company.
A federal judge denied BiT Global’s request for a temporary restraining order, stating that the firm failed to demonstrate imminent and irreparable harm from Coinbase’s plans to delist WBTC (Wrapped Bitcoin). BiT Global had sued Coinbase, alleging unfair business practices. Coinbase defended its decision, citing concerns about control of WBTC falling into the hands of Justin Sun, co-founder of Tron, who was accused of fraud and market manipulation. The court also questioned whether a loss of profits constitutes irreparable harm. WBTC, used in decentralized finance, is backed 1:1 with Bitcoin reserves and enables lending, borrowing, and trading via decentralized applications. Despite the scrutiny, BiT Global reported growth and expansion of WBTC.
A federal judge denied BiT Global’s request for a temporary restraining order Wednesday, finding that the Hong Kong-based firm failed to show an imminent and irreparable harm that would come from Coinbase’s plans to soon delist WBTC, or Wrapped Bitcoin. “Ultimately, I have no evidence from you about what is to come,” U.S. District Judge Araceli Martínez-Olguín told BiT Global’s attorney. “I will not stop Coinbase from delisting WBTC.” BiT Global sued Coinbase last week, alleging the exchange’s plans to delist WBTC Thursday, while promoting its own version of wrapped Bitcoin, amounted to unfair business practices. As a custodian for WBTC reserves alongside BitGo, BiT Global sought a judgement prohibiting Coinbase from delisting the $14 billion product from its exchange. BiT Global lost. Today they asked the Court to order us to stop from delisting wBTC to protect our customers. Today the Court said no. We appreciate the Court’s consideration and the outstanding advocacy of Sonal Mehta and her team at @WilmerHale.
Responding to BiT Global’s lawsuit earlier this week, Coinbase said its decision to delist WBTC was motivated by “unacceptable risk that control of WBTC would fall into the hands of Justin Sun,” the co-founder of Tron, a layer-1 blockchain. While he vigorously denies the allegations, Sun was accused of fraud and market manipulation in an SEC lawsuit brought last year. When Coinbase launched its wrapped Bitcoin product, dubbed cbBTC, in September, Sun skewered the product, calling it “central bank Bitcoin” and a “dark day for BTC.” Sun serves as an advisor to BiT Global, Robert Liu, a board member at BiT Global, told CoinDesk in an October interview. That same month, Liu told Decrypt that Sun also acts as a “major financial supporter” of WBTC’s revamped custody setup.
During the hearing, Judge Martínez-Olguín asked BiT Global’s counsel how a loss of profits could be considered irreparable harm, as BiT Global had alleged. Kneupper & Covey Partner Cyclone Covey responded by saying that a 5% drop in WBTC’s supply immediately followed Coinbase’s delisting announcement. Coinbase’s attorney, WilmerHale Partner Sonal Mehta, countered that WBTC’s trading volume on Coinbase constitutes less than 1% of WBTC’s overall trading, which could not result in “lost sales.” She also said WBTC’s supply was already dropping before Coinbase’s delisting move. “This case is about Coinbase being allowed to do what it needs to do to protect its platform,” she said. “It’s not about monopolies. It’s not about antitrust claims.”
Wrapped Bitcoin, whether it’s issued by Coinbase or BitGo and BiT Global, is commonly used in decentralized finance, or DeFi. Backed 1:1 with Bitcoin reserves, the products enable users to effectively use Bitcoin in lending, borrowing, and trading via decentralized applications. BitGo said that it was team