Coinbase’s chief legal officer has responded to criticism of the exchange’s token listing and delisting practices following a $1 billion lawsuit accusing the company of anti-competitive conduct related to Wrapped Bitcoin.
Cryptocurrency exchange Coinbase is being sued for more than $1 billion by BiT Global Digital, which accuses it of harming the cryptocurrency market with its decision to delist Wrapped Bitcoin (WBTC) last November.
BiT Global claimed in its December 13 complaint that Coinbase decided to delist wBTC in order to promote its own competing Bitcoin-based token, Coinbase BTC (cbBTC).
A day after the lawsuit was filed, Coinbase’s Chief Legal Officer Paul Grewal defended the exchange’s approach, emphasizing Coinbase’s commitment to high listing standards.
“If an asset no longer meets our listing criteria, we will dispose of it. If other assets can meet or exceed market requirements without sacrificing these standards, we will list them,” Grewal wrote for X.
source: Paul Grewal
The lawsuit was filed on November 19, four months after Coinbase first announced development of the cbBTC token. This was seen as a fairly positive development to strengthen the adoption of Bitcoin-based decentralized finance (DeFi), or BTCFi.
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Cryptocurrency industry backlash following wBTC delisting
Grewal’s post received backlash from cryptocurrency industry insiders, including Tron founder Justin Sun. He challenged the company’s transparency and questioned the consistency between Grewal’s statement and Coinbase CEO Brian Armstrong’s previous comments.
source: justin sun
A screenshot attached by Sun shows Coinbase CEO Brian Armstrong saying the exchange is “asset agnostic” because of his belief that “consumers should have choice in the cryptocurrency economy.”
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Coinbase Faces Billion WBTC Delisting Lawsuit: What You Need to Know
The lawsuit alleges that Coinbase’s actions constitute a monopoly on the market for Bitcoin, which is wrapped up under the Sherman Act. The lawsuit accuses Coinbase of engaging in predatory conduct, including publishing false statements about wBTC’s compliance, undermining its market position. BiT Global claims that Coinbase’s actions are designed to drive market dominance to 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. If an asset does not meet these criteria, it will be delisted,” the spokesperson said.
The exchange announced the delisting of the token on November 19, citing failure to meet undisclosed token listing criteria.
The lawsuit was filed by the law firm Kneupper & Covey in the U.S. District Court for the Northern District of California. According to BiT Global lawyers, Coinbase has been loading memecoins for trading on its platform, challenging wBTC’s compliance with listing standards shortly after launching a similar product.
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