Coinbase is under fire for its decision to remove Wrapped Bitcoin (WBTC) from its platform, citing risks linked to Justin Sun, the founder of Tron.
In November, the delisting of WBTC was announced across all its platforms. Following this, the company faces a lawsuit for over $1 billion by BiT Global Digital Limited, a company tied to Sun.
On December 17, Coinbase responded to the lawsuit, claiming it delisted WBTC due to Sun’s history of financial misconduct allegations and investigations. BiT Global argues the move wasn’t about regulatory or technical issues but a strategy to promote Coinbase’s own tokenized Bitcoin, cbBTC.
BiT Global first filed the complaint in November, seeking an emergency injunction to prevent Coinbase from delisting Wrapped Bitcoin. According to BiT Global, the decision was intended to undermine WBTC’s market position by instilling “fear, uncertainty, and doubt” about its regulatory status while promoting Coinbase’s cbBTC currency.
The lawsuit also accused Coinbase of defaming BiT Global by implying that its relationship with Justin Sun constituted major dangers. Coinbase noted that Sun has “repeatedly been accused of, investigated for, and sued for financial misconduct,” which it feels casts doubt on BiT Global’s credibility.
Critics have pointed out that Coinbase hasn’t provided solid technical or legal reasons for the delisting. Instead, many believe the decision was based on “guilt by association.” WBTC has generally been seen as a reliable token, connecting Bitcoin to Ethereum’s ecosystem.
A Bitcoin enthusiast on X (formerly Twitter), Pledditor, summed up the frustration: “It’s basically just they don’t like Justin SunThat’s really just it. They don’t give any technical or legal arguments about why wBTC can’t be listed. It’s just guilt by association.”
Gabor Gurbacs, a founder of PointsVille, criticized Coinbase for treating Justin Sun this way, noting that Coinbase is also under SEC investigation. He warned that questioning someone’s reputation like this could backfire and expose company issues.
Critics remain unconvinced by Coinbase’s reasoning, noting the lack of legal or technical details and pointing out WBTC’s strong reputation as a reliable bridge between Bitcoin and Ethereum.
Justin Sun has often been involved in crypto controversies, including a 2023 lawsuit by the U.S. SEC over allegations of fraud and market manipulation, which he denied. His connection to multiple blockchain projects has made him a divisive figure in the industry.
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