As a seasoned analyst with years of experience in the crypto space, I find Coinbase’s decision to delist Wrapped Bitcoin (wBTC) somewhat intriguing. The exchange’s move comes shortly after its announcement of cbBTC, its own version of wrapped Bitcoin. This strategic maneuver seems to be a play to assert dominance in the DeFi landscape and capitalize on the controversy surrounding wBTC.
On December 19, 2024, Coinbase plans to halt trading of Wrapped Bitcoin (WBTC). This decision was made due to unspecified issues in not meeting the exchange’s listing requirements.
Coinbase disclosed that they will halt trading of Wrapped Bitcoin (wBTC) in December, as this digital asset did not meet their criteria for listing on the platform. The specific reasons behind this decision have not been shared publicly.
Coinbase Begins Phasing Out wBTC
According to a recent announcement on their platform, Coinbase (COIN) has decided to stop trading Wrapped Bitcoin (wBTC) due to claims that it did not meet their listing requirements. As stated in a blog post on November 19th, the exchange explained this decision.
On a regular basis, we keep an eye on the assets listed on our exchange to make sure they adhere to our listing requirements. Following our latest assessment, Coinbase has decided to temporarily halt trading for wBTC (wBTC) as of December 19, 2024, approximately at noon Eastern Time.
— Coinbase Assets 🛡️ (@CoinbaseAssets) November 19, 2024
The exchange has already begun phasing out wBTC, explaining it is in the process of removing wBTC from its platform due to an issue with the token under Coinbase’s listing standards. Coinbase explained that it had already discontinued market trading of wBTC, only facilitating trades in limit orders. In a thread, the exchange said:
Coinbase.com’s Simple and Advanced Trade, Coinbase Exchange, and Coinbase Prime platforms will temporarily halt trading. However, your wrapped Bitcoin (wBTC) assets will still be accessible, and you can withdraw them whenever you wish.
Coinbase Launches Its Own Version of Wrapped Bitcoin
Coinbase recently chose to discontinue support for wBTC following their unveiling of cbBTC, their own iteration of wrapped Bitcoin. cbBTC operates on Coinbase’s native blockchain, Base. The exchange asserts that “Coinbase is ushering in a new phase for DeFi with cbBTC,” bolstered by their “10+ years of secure custody for billions in Bitcoin for institutions and clients.
On its website, Coinbase detailed how cbBTC works, explaining:
For customers residing in certain regions, the ‘send & receive’ feature on Coinbase allows for effortless transition of Bitcoin between on-chain and off-chain transactions. When you transfer your Bitcoin from Coinbase to platforms like Base, Solana, or Ethereum, it will be instantly swapped with an equivalent amount of cbBTC. Conversely, when you receive cbBTC in your Coinbase account, it will be converted back into Bitcoin on a 1:1 basis. Importantly, the cbBTC does not have its own order book or trading pair listed on Coinbase.
wBTC, short for Wrapped Bitcoin, serves as a representation of Bitcoin on platforms like Ethereum. Essentially, wBTC is a digital asset that BitGo, a cryptocurrency guardian, holds the actual Bitcoin backing it.
Lately, wBTC has been under scrutiny following BitGo’s announcement of a partnership with BiT Global, a custodian that partially belongs to Justin Sun. On August 9th, BitGo consented to give partial management of the multi-signature wallet containing the custodied Bitcoin to Hong Kong-based BiT Global. This decision has sparked concerns among many, including Threshold, a competitor in the Bitcoin wrapper market. Threshold, in expressing their worries about Sun’s involvement, voiced their opinion on his participation in the joint venture:
The announcement stirred controversy because it involves Justin Sun, leading to widespread worries among the community that some of his associated projects might be misusing assets.
Justin Sun is the creator of TRON and also owns Poloniex, a cryptocurrency exchange. In 2023, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Sun, accusing him and his companies of deceitful practices that artificially inflated the value of TRON (TRX) and BTT tokens, as well as selling unregistered securities. A few weeks following these charges, Binance, another cryptocurrency exchange, stopped supporting TRON (TRX).
In a recent conversation at X Spaces, BitGo’s chief executive, Mike Belshe, reassured the community about Sun’s limited influence over BiT Global. The structure of BiT Global is set up so that no one person holds more than 20% ownership, and the keys are distributed among various parties for security purposes.
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2024-11-20 13:06