BiT Global vs. Coinbase: Wrapped Bitcoin’s Future Hangs in the Balance

A federal judge has rejected BiT Global’s request for a temporary restraining order, saying the Hong Kong-based company failed to prove any immediate or irreparable harm from Coinbase’s plan to delist Wrapped Bitcoin (WBTC). The decision means Coinbase can move forward with its scheduled removal of WBTC from its platform.

“I have no evidence from you about what is to come,” said U.S. District Judge Araceli Martínez-Olguín during the hearing. Addressing BiT Global’s legal team, she added, “I will not stop Coinbase from delisting WBTC.”

BiT Global Lawsuit Against Coinbase

BiT Global filed a lawsuit last week, accusing Coinbase of unfair practices. The firm alleged that the exchange’s decision to delist WBTC while promoting its own wrapped Bitcoin product, cbBTC, gave Coinbase an unfair advantage. BiT Global, which manages WBTC reserves alongside BitGo, wanted the court to stop Coinbase from removing the $14 billion asset from its exchange.

Coinbase, in its defense, cited concerns over potential risks linked to WBTC’s management. The exchange claimed the asset could come under the influence of Justin Sun, the co-founder of the Tron blockchain, which it considered an “unacceptable risk.”

Sun, who denies the accusations, is currently fighting allegations of fraud and market manipulation in an SEC lawsuit filed last year. He has criticized Coinbase’s cbBTC, calling it “central bank Bitcoin” and describing its launch as a “dark day for BTC.”

Robert Liu, a BiT Global board member, confirmed in interviews that Sun serves as an advisor and financial supporter for the firm. Sun also plays a key role in WBTC’s custody structure, according to Liu.

Court Skeptical of Irreparable Harm Claims

During the hearing, Judge Martínez-Olguín questioned whether a potential loss of profits qualified as irreparable harm, as BiT Global had claimed. Cyclone Covey, a partner at Kneupper & Covey representing BiT Global, argued that the market had already reacted to Coinbase’s delisting plans, pointing to a 5% drop in WBTC’s supply after the announcement.

For now, Coinbase is clear to proceed with its decision, leaving BiT Global to weigh its next steps in the legal battle.