Coinbase’s chief legal officer has responded to criticism of the exchange’s token listing and delisting practices after a $1 billion lawsuit accused the company of anticompetitive behavior regarding Wrapped Bitcoin.
Crypto exchange Coinbase is being sued for over $1 billion by BiT Global Digital, which is accusing the company of harming the crypto market through its decision to delist Wrapped Bitcoin (WBTC) in November.
In a Dec. 13 complaint, BiT Global alleged that Coinbase decided to delist wBTC to promote its own competing Bitcoin-based token, Coinbase BTC (cbBTC).
A day after the lawsuit, Coinbase’s chief legal officer, Paul Grewal, defended the exchange’s approach, emphasizing its commitment to high listing standards.
“When an asset no longer meets our listing standards, we will drop it. When another asset can meet or exceed market requirements without sacrificing those standards, we will list it,” Grewal wrote on X.
Source: Paul Grewal
The lawsuit was filed on Nov. 19, four months after Coinbase first teased the development of the cbBTC token, which was seen as a significant positive development to bolster the adoption of Bitcoin-native decentralized finance (DeFi), or BTCFi.
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Crypto industry backlash following wBTC delisting
Grewal’s post received backlash from crypto industry insiders, including from Tron founder Justin Sun, who challenged the company’s transparency, questioning the alignment between Grewal’s statement and earlier remarks by Coinbase CEO Brian Armstrong.
Source: Justin Sun
Sun’s attached screenshot shows Coinbase CEO Brian Armstrong stating that the exchange is “asset agnostic” due to its belief that “consumers should have a choice in the crypto economy.”
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Coinbase faces $1 billion wBTC delisting lawsuit: What you need to know
The suit claims Coinbase’s actions amount to monopolization of the wrapped Bitcoin market under the Sherman Act. The lawsuit accuses Coinbase of predatory practices, including issuing false statements about wBTC’s compliance to undermine its market position. BiT Global claims Coinbase’s actions were designed to steer market dominance toward cbBTC.
In a statement to Cointelegraph, a Coinbase spokesperson reiterated the company’s standards. “Coinbase is committed to maintaining the high integrity of our listing standards. Should an asset fail to meet those standards, it is delisted,” the spokesperson said.
The exchange announced the token delisting on Nov. 19, citing undisclosed failures to meet its standards for listing tokens.
The suit was filed by law firm Kneupper & Covey in the United States District Court for the Northern District of California. According to the BiT Global attorneys, Coinbase has been onboarding memecoins for trading on its platform while challenging wBTC compliance with listing standards shortly after releasing a similar product.
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