Bit Global Digital filed a lawsuit, estimating market share losses of up to $1B when Coinbase delisted WBTC.
Bit Global Digital predicted $1B in losses when Coinbase delisted Wrapped BTC (WBTC). Bit Global warned the US District Court, Northern District of California of the lawsuit’s possible direct and reputational consequences in a December 13 filing.
Bit Global claimed Coinbase saw the potential of WBTC, the most popular wrapped Bitcoin. Coinbase debuted cbBTC on Ethereum, Base, and Solana in 2024.
Coinbase listed WBTC and the new cbBTC until November 19, when it announced the delisting. The complaint said the conduct undermined free competition and damaged the longest-running wrapped token. After cbBTC launched in September, all users, notably DeFi lenders, were concerned.
The complaint alleges that cbBTC and WBTC’s delisting might cause $1B in reputational and market damage. Since the trial will establish the claim amount, the filing does not specifically seek such damages.
Coinbase accounts for 0.71% of WBTC spot volumes. Binance and Uniswap V3 are where WBTC is most active.
The switch to cbBTC followed a WBTC control dispute. Bit Global and its affiliate own WBTC, which BitGo issued. The new setup risks releasing WBTC on other networks, including TRON. Justin Sun’s control over WBTC supply and collateral raised worries.
WBTC is one of the most transparent wrapped tokens, having public collateral addresses. Concerns exist about issuing WBTC on TRON without transparent collateral or using BTC collateral. TRON has 99 WBTC, an early test run.
With 652 tokens on Solana and 4,229 on Base, Coinbase’s wrapped token has grown to 21,605 cbBTC. It must catch up to 135,843.65 WBTC supply.
Over the previous several months, WBTC burns predominated due to the issuer and controller debate. WBTC supply is at its lowest since 2021, down from around 152K tokens in summer 2024. At BTC over $101,000, the lower supply may be one of Bit Global Digital’s harms.
Sky Ecosystem, previously Maker DAO, may ditch WBTC along with Coinbase. DeFi still has two WBTC pools but is considering liquidating them and converting to cbBTC.
Other major DeFi protocols also control a large portion of WBTC. Aave V3, the largest wallet, receives 24.92% of WBTC. The asset has expanded to Compound, Morpho, Wormhole, and other bridges.
Wintermute is a major WBTC minter and burner. WBTC is crucial in various trading pairs, bridges, and lending collateral pools, and its use has not harmed all DeFi firms.
Traceability and transparency, with updated asset evidence, are WBTC’s major benefits. Coinbase says all cbBTC is backed by BTC but hasn’t provided a wallet containing the BTC.
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