Launchy Regulatory Roundup #18- Coinbase Faces $1B Lawsuit Over wBTC Delisting and cbBTC Launch

How Fairshake Turned Crypto into a Powerhouse | US Banking Regulators “Rightsizing”

Marco Manoppo & Muhammad Reynaldi Ariananda Arkiang
December 15, 2024

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Welcome to our 18th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

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Crypto has moved from the fringes to the heart of political and regulatory debates. With PACs like Fairshake shaping elections and Coinbase’s $1B lawsuit spotlighting market power struggles, the industry is redefining its role.

In Today's Edition:

Headline: Coinbase $1B Lawsuit Over wBTC 🔵
Global Legal Roundup: 🇺🇲 Banking Regulators “Rightsizing,” 🇪🇺 EU Struggle with MiCA, and many more.
Case Study: How Fairshake Turned Crypto into a Political Powerhouse 💪

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HEADLINE

Coinbase Faces $1B Lawsuit Over wBTC

When an asset no longer meets our listing standards, we will drop it. When another asset can meet or exceed market requirements without sacrificing those standards, we will list it. Thank you Bit Global for the chance to show this to a US federal court and on the entire global… x.com/i/web/status/1…
— paulgrewal.eth (@iampaulgrewal)
11:01 PM • Dec 13, 2024

State of play: Coinbase is facing a $1B lawsuit filed by Justin Sun’s BiT Global, alleging anticompetitive behavior tied to the delisting of Wrapped Bitcoin (wBTC) and the launch of its own competing product, Coinbase BTC (cbBTC).

The lawsuit claims that Coinbase is violating antitrust laws, including the Sherman Act, by undermining wBTC’s market position and steering dominance toward cbBTC.
BiT Global alleges that Coinbase delisted wBTC after announcing cbBTC in September, claiming wBTC failed to meet listing standards while onboarding memecoins.
Critics, including Tron founder Justin Sun, have questioned Coinbase's transparency, pointing to inconsistencies in its statements.
Coinbase’s chief legal officer, Paul Grewal, defended the company’s decision, emphasizing its commitment to listing standards.
Despite the controversy, wBTC’s market cap has grown significantly, reaching $13.4B, overshadowing cbBTC’s $2B.
The case was filed in the Northern District of California on December 13.

What’s Next: The case will move forward in California, with BiT Global accusing Coinbase of anticompetitive practices. A ruling could set important standards for how exchanges handle token listings (and delisting).

Why it Matters: The crypto industry is skeptical about Justin Sun’s expanding influence and raised concerns about potential market manipulation, noting that the delisting followed the transfer of wBTC custody to BiT Global.

Our Take: If BiT Global wins, it could pressure exchanges to be more transparent and cautious about favoring their products.

GLOBAL LEGAL ROUNDUP

North & South America:

🇺🇸 NY regulator approves Ripple’s RLUSD stablecoin.
🇺🇲 Trump team seek ways to slim or abolish banking regulators.
🇺🇲 a16z’s Brian Quintenz top pick for CFTC chair under Trump.
🇺🇲 Texas lawmaker proposes bill to establish strategic Bitcoin reserve.
🇺🇸 SEC advances NYSE’s filing to list Bitwise Bitcoin and Ethereum ETF.
🇺🇸 Early Bitcoin investor jailed for unreported crypto gains in $4M BTC sale.
🇺🇲 Judge slams FDIC’s ‘lack of good-faith’ in censoring crypto letters to banks.
🇺🇲 Crypto advocate French Hill named Chair of House Financial Services Committee.
🇨🇦 Vancouver City Council passes pro-Bitcoin motion citing fiat challenges.
🇸🇻 🇦🇷 El Salvador & Argentina regulators sign an agreement to develop the crypto industry.

Europe:

🇷🇺 Russian lawmaker proposes creating a strategic Bitcoin reserve.
🇮🇹 Italy set to scale back planned tax hike on crypto capital gains.
🇺🇦 Ukraine set to legalize crypto by 2025 under strict regulations.
🇬🇧 Bank of England watchdog asks firms to disclose crypto exposure.
🇪🇺 Coinbase prepares to delist Tether’s USDT stablecoin in Europe.
🇪🇺 EU countries struggle to implement MiCA as deadline for crypto regulatory revamp looms.

MENA:

🇦🇪 Abu Dhabi Global Market recognized USDT as an accepted virtual asset.

APAC:

🇮🇳 India is preparing for a CBDC-driven economy.
🇦🇺 Australia fines Kraken operator $5M for regulatory breaches.
🇦🇺 Australia proposes stricter crypto rules to curb financial crime.
🇯🇵 Japanese lawmaker ‘Satoshi’ questions gov’t plans for Bitcoin reserve.

CASE STUDY

How Fairshake Turned Crypto into a Political Powerhouse

Source: Punchbowl News

State of play: In just two years, the crypto industry has transformed from a political pariah to a major influence in Washington, thanks to the aggressive tactics and massive spending of the Fairshake super PAC.

Backed by Coinbase, Ripple Labs, and a16z, Fairshake spent $139M in the 2024 election cycle, focusing on congressional races to secure pro-crypto lawmakers.
The PAC aims to promote innovation-friendly legislation, such as the Financial Innovation and Technology for the 21st Century Act (FIT21).
The PAC is also opposing restrictive policies like the SEC’s controversial accounting rule, SAB 121.
Fairshake’s targeted campaign strategy included both Republicans and Democrats, funding over 50 congressional candidates, nearly half of whom were newly elected.
The PAC's efforts were pivotal in advancing FIT21, which passed the House with bipartisan support.

Additionally, the PAC demonstrated its influence by derailing crypto critics, such as Senator Sherrod Brown and Representative Katie Porter, while avoiding races like Senator Elizabeth Warren’s, where success was deemed unlikely.

The PAC also influenced grassroots efforts through Coinbase’s Stand With Crypto initiative.
The initiative rallied nearly 2M supporters for pro-crypto policies.
Fairshake's war chest of $103M heading into 2026 positions it as a dominant player, ensuring lawmakers remain aware of the industry’s electoral impact.

Our Take: Crypto’s success in 2024 highlights how concentrated funding and strategic advocacy can reshape political landscapes, setting a precedent for industry-specific influence in politics.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

SEC’s filing on BNB secondary trading triggers liability under Howey.
Rep. Ritchie Torres’s examination on SEC order of destruction of digital art.
Chervinsky’s take on reconfirmation of SEC Commissioner Caroline Crenshaw.

— Donald J. Trump (@realDonaldTrump)
6:30 PM • Dec 14, 2024

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