As a seasoned crypto investor with over a decade of experience navigating this ever-evolving landscape, I find myself both intrigued and concerned by recent developments. Coinbase’s decision to delist Wrapped Bitcoin (wBTC) has sparked a heated debate that seems destined for the courts, with allegations of anticompetitive behavior and monopolization tactics. While it’s no surprise to see such maneuvers in this industry, I can’t help but chuckle at the irony – Coinbase accusing another entity of financial misconduct while they themselves have been under numerous investigations.
Coinbase’s decision to delist Wrapped Bitcoin (wBTC) has sparked significant controversy and a $1 billion lawsuit from BiT Global Digital Limited, a joint custodian of wBTC’s reserves.
In November, Coinbase revealed intentions to remove wBTC from their platform, stating that the digital asset did not comply with unspecified listing criteria. This move sparked dissent from BiT Global Digital Limited, a Hong Kong crypto exchange and co-custodian of wBTC’s Bitcoin reserves along with BitGo since August.
It’s been claimed that Coinbase’s recent action was strategically designed to boost its own alternative product, Coinbase Wrapped BTC (cbBTC), which debuted on September 12 and has since gained significant popularity, attracting approximately $1.4 billion in total value. This makes cbBTC one of the most widely used Bitcoin wrappers currently available.
In response to being delisted, BiT Global filed a lawsuit against Coinbase on December 13, claiming more than $1 billion in compensation for alleged damages. The lawsuit alleges that Coinbase has acted anti-competitively, such as trying to monopolize the wrapped Bitcoin market under the Sherman Act, using predatory tactics to weaken wBTC’s market standing, and making misleading statements suggesting wBTC did not meet listing requirements.
A few days after the incident, Paul Grewal, Coinbase’s top legal officer, explained their actions by stating that assets which do not meet the listing criteria get removed from their platform.
The case’s latest developments came on Dec. 17, after Coinbase filed a response to the lawsuit citing risks tied to crypto entrepreneur Justin Sun, including accusations of financial misconduct and regulatory investigations. The exchange’s response reinforced the idea that the token delisting was not due to technical reasons. On X, users recalled that Coinbase itself has been under numerous investigations.
On December 18th, Judge Araceli Martinez-Olguin decided not to issue a temporary order halting Coinbase from delisting the token, based on BiT Global’s legal team not being able to demonstrate “an immediate, irreversible damage” in their case.
The decision, however, seems to be just the beginning of yet another legal battle.
As a researcher delving into this week’s crypto landscape, I am examining Deutsche Bank’s blockchain implementation, USDT trading dynamics in Europe, the progress of FTX creditor compensation, and BVNK’s expansion plans to the United States.
Deutsche Bank builds L2 blockchain on Ethereum
Deutsche Bank, Germany’s leading bank, is said to be creating its own layer-2 (L2) blockchain platform on Ethereum using ZKsync technology. This move is intended to tackle compliance issues that arise when using public blockchains in regulated finance sectors. The L2 solution, part of Project Dama 2, aims to enhance transaction speed and provide robust regulatory protections by directly integrating with Ethereum. As reported by Bloomberg, this initiative is connected to the Monetary Authority of Singapore’s Project Guardian, a collaborative effort involving 24 financial institutions that are investigating blockchain-based asset tokenization.
Tether USDT trading continues across Europe despite Coinbase delisting
Despite Coinbase’s decision to delist Tether’s USDt stablecoin in Europe due to upcoming regulatory requirements, major cryptocurrency exchanges such as Binance, Crypto.com, Kraken, KuCoin, MEXC, and Bitget continue to support trading of USDT in the region. This comes amidst the approaching full enforcement of the Markets in Crypto-Assets Regulation (MiCA) on December 30th. It’s worth noting that while Coinbase categorizes USDT as a MiCA-restricted stablecoin, European authorities have yet to issue a definitive statement regarding its compliance with local laws.
Kraken and BitGo will help distribute the first FTX payments in 2025
Representatives for the bankrupt cryptocurrency exchange FTX have revealed that a reorganization plan, aimed at returning funds to customers, will commence on January 3rd. In a statement released on December 16th, FTX detailed a schedule for the initial distribution of user funds, nearly two and a half years after the company filed for Chapter 11 bankruptcy protection. The debtors indicated that the first group of claim holders can anticipate repayments within 60 days from January 3rd, 2025 (provided specific conditions are met). FTX’s debtors have also disclosed that crypto companies BitGo and Kraken will help distribute recovered funds to FTX users. Further groups of customers awaiting repayments will be announced in due time, as per the exchange.
BVNK raises $50M to expand into US stablecoin market
Stablecoin infrastructure company BVNK closed a $50 million Series B funding round led by Haun Ventures, with plans to expand into the United States. According to a Dec. 17 announcement, the fresh capital will be used to expand BVNK’s operations to San Francisco and New York City. Based in London, BVNK is now estimated to be worth about $750 million. Its US offices will develop a local banking infrastructure and work on operational licenses to serve local companies. Participants in the round included Coinbase Ventures, Scribble Ventures, DRW VC and existing investors Avenir and Tiger Global.
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2024-12-21 00:16