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Jimmy Aki
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Jimmy Aki
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Coinbase is facing criticism after deciding to delist Wrapped Bitcoin (WBTC) from its platform, citing unacceptable risks linked to Justin Sun, the founder of Tron. The announcement of the suspension, made in November, has now become the subject of a lawsuit filed by Sun-affiliated BiT Global.
Coinbase Faces Backlash Over Wrapped Bitcoin Delisting
On December 17, Coinbase filed a response to BiT Global’s lawsuit, attributing the delisting to the “unacceptable risk” posed by Sun. It cited ongoing investigations and allegations of financial misconduct against the crypto billionaire.
The dispute stems from BiT Global’s claim that Coinbase’s decision to delist WBTC was not based on technical or regulatory grounds but was a strategic move to promote its rival tokenized Bitcoin product, cbBTC.
BiT Global first filed the lawsuit in November, seeking an emergency injunction to halt Coinbase’s delisting of Wrapped Bitcoin.
According to BiT Global, the decision was aimed at harming WBTC’s market position, spreading “fear, uncertainty, and doubt” about its regulatory standing while promoting Coinbase’s cbBTC token.
The lawsuit also accused Coinbase of defaming BiT Global by suggesting its involvement with Justin Sun posed significant risks.
Coinbase stated that Sun has “repeatedly been accused of, investigated for, and sued for financial misconduct,” which it believes reflects poorly on BiT Global’s reliability.
Critics argue that Coinbase has failed to provide clear legal or technical reasoning for the delisting of Wrapped Bitcoin, instead basing its decision on what some see as “guilt by association.”
Bitcoin enthusiast Pledditor expressed their dissatisfaction on X, stating, “It’s basically just they don’t like Justin Sun… just guilt by association.”
Despite Coinbase’s assertions, the lack of specific legal or technical details regarding Wrapped Bitcoin has left many unconvinced. Critics also note that WBTC has been widely regarded as a reliable token, bridging Bitcoin to Ethereum’s ecosystem.
Past Controversies and Community Concerns
Justin Sun’s name has frequently been at the center of crypto controversies. In 2023, he was sued by the U.S. Securities and Exchange Commission (SEC) over allegations of fraud and market manipulation.
While Sun denied the accusations, his involvement with several blockchain projects has made him a polarizing figure.
The delisting of Wrapped Bitcoin has drawn attention to the token’s critical role in decentralized finance (DeFi). Despite the controversy, trading for WBTC continues across various platforms, though reduced liquidity could pose challenges in the long term.
As the lawsuit progresses, its outcome could set a precedent for how exchanges handle tokens associated with controversial figures or entities.
Some members of the crypto community see Coinbase’s actions as necessary to protect users from potential risks, while others view it as an overreach that undermines the principles of decentralization.
In the meantime, figures like Gurbacs warn that Coinbase’s approach could backfire. As he put it, “Coinbase itself is under SEC and numerous other investigations, probably many more than Justin and his businesses. Questioning someone’s reputation this way might bring out skeletons from their own closet.”
