Coinbase Says Justin Sun ‘Unnacceptable Risk’ to Wrapped Bitcoin After Delisting wBTC
Crypto exchange Coinbase has cited risks linked to Tron-founder Justin Sun during a lawsuit over its delisting of Wrapped Bitcoin (wBTC).
In a recent complaint, the wBTC custodian and Sun-affiliated BiT Global accused Coinbase of using wBTC – the tokenized representation of Bitcoin (BTC) on the Ethereum (ETH) blockchain – as a “cash grab” before delisting it and replacing it with its own version of the asset.
Said the complaint,
“In the case of wrapped Bitcoin, Coinbase viewed it as just another cash grab. It saw a competitor, wBTC, that had something it wanted: an innovative product that released value inherent in Bitcoin and let users utilize that value in bold new ways…
Coinbase decided it would take what it wanted. Once the value in wBTC had been demonstrated, Coinbase changed the rules, delisting wBTC from its platform so that it could no longer be traded on the Coinbase platform – and it did so shortly after launching its own knock-off clone called cbBTC.”
In response to the complaint, Coinbase says it made the decision to delist wBTC largely because of its links to Justin Sun and the risks that would arise should he have any influence over it. The exchange notes that Sun’s name is “conspicuously” left out of BiT’s complaint.
“Coinbase made the decision—based on a rigorous internal process—that wBTC should be delisted from Coinbase’s exchange due to the unacceptable risk that control of wBTC would fall into the hands of Justin Sun. BiT now asks the Court to override, on an emergency basis no less, Coinbase’s judgment that continuing to list wBTC could compromise the integrity of its platform and put customers at risk.
BiT seeks to force Coinbase to do business with an entity that no longer complies with Coinbase’s standards due to Mr. Sun’s ‘material involvement.’ And yet, Mr. Sun’s name and connection to wBTC is conspicuously absent from BiT’s Complaint and TRO (temporary restraining order) request. So too is any acknowledgement that he has repeatedly been accused of, investigated for, and sued for financial misconduct, and that reports of his alleged misdeeds abound in the press and crypto community more broadly.”
Coinbase also alleges that Sun is “infamous” in the crypto community and that he has been accused of several wrongdoings, including market manipulation and misappropriation of digital assets.
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