Coinbase Delists WBTC
Coinbase will stop trading Wrapped Bitcoin (WBTC) from December 2024. WBTC is the largest tokenized version of Bitcoin (BTC) on Ethereum and other blockchains.
The largest US cryptocurrency exchange Coinbase will stop supporting Wrapped Bitcoin (WBTC) trading from December 19, 2024. Coinbase determined that WBTC no longer meets its listing criteria on its platform.
Coinbase has now suspended market trading for WBTC, supporting only limit orders. Users can still access and withdraw WBTC at any time after trading is suspended.
WBTC, managed by BitGo, is a token representing Bitcoin on other blockchains and is often used as collateral in DeFi. According to DefiLlama, WBTC remains the most popular Bitcoin wrapper with $13.4 billion in value locked (TVL).
However, in August 2024, BitGo gave partial control of the multisignature wallet containing the Bitcoin backing WBTC to Hong Kong-based exchange BiT Global, which is closely linked to Justin Sun. This has raised concerns in the community, as the TRON founder had previously withdrawn $720 million in Bitcoin backing USDD.
Wrapped BTC expressed disappointment and surprise at Coinbase’s decision, while emphasizing its commitment to providing compliant, transparent, and decentralized Bitcoin tokenized products. They want Coinbase to reconsider its decision to delist WBTC. However, not only Coinbase, Sky (Maker DAO) has also decided to “quarantine” WBTC, with the same concerns about Justin Sun.
The event comes as Coinbase launched its competing product Coinbase Wrapped BTC (cbBTC) on September 12. In just a few months, cbBTC has quickly become one of the largest Bitcoin wrappers with $1.4 billion in TVL, according to CoinMarketCap.
However, Coinbase has also faced criticism for being less transparent than its competitors in the field. Some unfounded rumors also claimed that Coinbase issued unbacked IOUs in Bitcoin to provide to BlackRock, a cryptocurrency ETF issuer. In response, Coinbase promised to add verifiable proof of reserves to cbBTC soon.
Coinbase's removal of WBTC not only marks a major change in the exchange's strategy, but also reflects fierce competition in the Bitcoin wrapper field. While WBTC still holds the lead, Coinbase is working to promote cbBTC by increasing transparency and building trust from the community.
