Justin Sun-connected BiT Global drops wBTC-related legal spat with Coinbase

BiT Global, a firm backed by TRON founder Justin Sun that last year became a "strategic partner" with BitGo in offering the wBTC wrapped Bitcoin token, agreed to dismiss its lawsuit against Coinbase for delisting wBTC shortly after Coinbase launched a competitor token, cbBTC. 

According to a Friday filing, lawyers from BiT Global agreed to drop the lawsuit with prejudice, meaning it can't be brought again. Both firms agreed to pay their respective legal fees resulting from the lawsuit. 

"This important win affirms our clear right to manage security and risk for Coinbase users," Paul Grewal, the firm's top lawyer, said on X. "...we will not be bullied into continuing to list an asset that puts our customers at risk." 

Wrapped Bitcoin tokens allow users to leverage their Bitcoin holdings on different blockchain networks; both wBTC and cbBTC target the Ethereum ecosystem. However, the tokens require users to trust a centralized intermediary to custody the Bitcoin and issue the wrapped token. Sun's involvement with wBTC led Ethereum DeFi protocols MakerDAO and Aave to consider dropping support for the token as a collateral asset, ultimately opting instead for stricter risk parameters rather than removal. 

The lawsuit, filed by law firm Kneupper & Covey on behalf of BiT Global in December 2024, claimed that Coinbase delisting wBTC would be anti-competitive and violate "numerous state and federal laws," The Block previously reported. 

"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," the lawsuit stated.

Previous legal efforts to block Coinbase from delisting the token failed after a federal judge ruled in December that Coinbase had the right to delist the token. 

The move of wBTC out of the sole control of custody firm BitGo into the strategic partnership that includes Sun generated criticism from some in the cryptocurrency industry. 

"I think BitGo has a very strong reputation because we have applied the strictest principles of security to everything that we do," BitGo CEO Mike Belshe told The Block at the time, in response to the criticism. "I think in the end, people are going to realize this is a big nothingburger." 

The wBTC token currently has a market capitalization of around $13.6 billion, according to CoinGecko data, while Coinbase's cbBTC has a market capitalization of around $4.7 billion. Both tokens are currently valued near their all-time high market caps. 

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