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    Coinbase faces backlash and legal challenges after delisting Wrapped Bitcoin citing risks linked to Tron’s Justin Sun

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    Crypto exchange, Coinbase, is under criticism for its reasons behind delisting Wrapped Bitcoin (WBTC), citing “unacceptable risk” linked to Tron founder, Justin Sun. Coinbase’s claims of Sun’s financial misconduct and regulatory scrutiny have drawn backlash, and some suggest prejudice against Sun. Sun’s company, BiT Global, has sued Coinbase for damaging the WBTC market. Amidst these, Coinbase itself is embroiled in legal issues with the US Securities and Exchange Commission and has settled a case previously with the New York Department of Financial Services.

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    Coinbase, the crypto exchange, is facing backlash for the reasons it gave to explain its decision to stop listing Wrapped Bitcoin (WBTC). The company claimed “unacceptable risk” involved with Justin Sun, the founder of the Tron cryptocurrency, as a reason behind this decision.

    On December 17, Coinbase responded to a lawsuit from Sun’s company, BiT Global, which accuses Coinbase of damaging the WBTC market by delisting the currency in November.

    In its response, Coinbase pointed to different kinds of risks linked to Sun, including claims of financial malpractice and ongoing investigations by regulators.

    This response has been criticized by many in the crypto community, with accusations that Coinbase did not provide enough legal or technical reasons for the delisting decision. Some even pointed out that Coinbase itself has gone through many investigations.

    A crypto enthusiast, Pledditor, bashed Coinbase on December 17, stating that the exchange didn’t offer valid arguments for taking WBTC off their platform. They added that the real reason seems to be because they don’t like Justin Sun.

    Pledditor argued that Coinbase just associated Sun’s alleged wrongdoings with WBTC, meaning guilt by association.

    The legal filing by Coinbase noted Sun’s supposed misdeeds and expressed doubt about BiT Global’s trustworthiness because of its ties to Sun.

    Sun was hit with fraud and securities violation charges in 2023 by the US Securities and Exchange Commission (SEC). There were also investigations into him by the US Federal Bureau of Investigation and the prosecutor’s office for the Southern District of New York.

    Additionally, there are ongoing legal issues between Coinbase and the SEC. In light of these challenges, some have questioned Coinbase’s actions and motives.

    VanEck adviser Gabor Gurbacs found it ironical that Coinbase was treating Justin this way given the company is also under investigations by the SEC and possibly many other bodies. He said accusing someone in this manner might just expose one’s own secrets.

    Coinbase was sued by the SEC in June 2023 for allegedly offering unregistered securities. This happened a few months after Sun was charged with fraud. The case is still pending, while Paul Grewal, Coinbase’s chief legal officer, has urged regulators to be more understanding when dealing with the crypto industry.

    Earlier in 2023, Coinbase had settled a $100 million case with the New York Department of Financial Services over its compliance program.

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