Simply put
- BIT Global has decided to drop its lawsuit against Coinbase regarding the listing of Bitcoin (WBTC).
- This legal action originated after Coinbase announced it wouldn’t list WBTC, following BIT Global’s plans to become involved with the token, which is linked to crypto pioneer Justin Sun.
- In the meantime, Coinbase’s own wrapped Bitcoin product, CBBTC, has been gaining market traction since the delisting of WBTC.
Digital asset custodian Bit Global has chosen to permanently dismiss its lawsuit against Coinbase over WBTC, which is one of the most popular tokens in the market.
The parties agreed on Friday to dismiss the case due to bias, which also indicates that they won’t be able to bring up the same issues in the future.
Bit Global took legal action against Coinbase back in December when the exchange removed WBTC, a popular digital asset that enables Ethereum traders to tap into Bitcoin reserves that are backed one-to-one. This makes WBTC an appealing option among crypto traders.
Several wrapped Bitcoin tokens exist, but WBTC is currently the top player, boasting a market cap of around $13.88 billion, which places it as the 12th largest cryptocurrency.
In August, WBTC’s chief custodian, Bitgo, announced a partnership with Hong Kong-based Bit Global to diversify their services. Previously, all reserves were managed in the U.S., but this move allows for broader custodial options.
However, this partnership has faced criticism due to Bit Global’s connections with controversial figures in the crypto space, including Justin Sun. Some industry leaders have expressed concerns that Sun’s involvement could introduce significant risks to WBTC’s reliability.
Coinbase later hinted at launching its own competitor, CBBTC, and subsequently delisted WBTC in December, claiming that the token didn’t meet their listing requirements.
A few weeks after the delisting, Bit Global filed a lawsuit, alleging that Coinbase’s actions were a predatory attempt to boost CBBTC’s value by removing competitors. Coinbase, on the other hand, argued that their decision was a necessary step to protect customers from unacceptable risks related to WBTC’s control being in Sun’s hands.
A federal judge, however, dismissed Bit Global’s request to halt the delisting, stating there wasn’t enough evidence to show it would cause immediate damage to crypto custodians.
As Bit Global did not immediately respond to inquiries regarding their decision to drop the lawsuit, it was noted that a federal judge previously suggested allowing both parties to file for dismissal of the entire case.
Coinbase’s Chief Legal Officer Paul Grewal indicated that there are currently no plans to reintroduce WBTC to their platform.
Since WBTC’s removal, Coinbase has seen significant growth in the wrapped Bitcoin sector, with CBBTC’s market capitalization tripling to around $4.84 billion since its launch in December, despite Bitcoin’s price remaining relatively stable.
