TL;DR
- Coinbase will delist Wrapped Bitcoin (wBTC) on December 19, 2024, citing “listing standards” following an internal review.
- This decision comes after the launch of cbBTC, Coinbase’s own version of Wrapped Bitcoin, on the Base blockchain.
- The delisting has sparked controversy due to BitGo’s connection with BiT Global, linked to Justin Sun, and BitGo’s criticism of the centralization of cbBTC.
Coinbase has announced that it will proceed with delisting Wrapped Bitcoin (wBTC) from its platform, with trading scheduled to be suspended on December 19, 2024.
Why Coinbase Is Delisting wBTC
According to the company, this decision follows a review of the “listing standards” it maintains for assets on its exchange. wBTC is a token that represents Bitcoin on the Ethereum blockchain and other networks, and it has been offered by BitGo, the custodian behind this product. The delisting of wBTC comes after Coinbase launched its own version of Wrapped Bitcoin, known as cbBTC, on the Base blockchain.
The Justin Sun Factor
However, Coinbase has generated some controversy, particularly because wBTC has faced criticism due to the association between BitGo and BiT Global, a company partially linked to Justin Sun. Despite concerns within the crypto community about the centralization that Sun’s involvement might imply, BitGo has defended its model, assuring that Sun has minimal operational control over BiT Global. The company emphasized that the custody structure of wBTC, where access keys are split between multiple parties, is secure and designed to protect the funds.
Accusations of Centralization and Lack of Security
On the other hand, Mike Belshe, CEO of BitGo, has expressed his disagreement with Coinbase’s stance, criticizing the centralization of its new product, cbBTC. Belshe believes that the exchange’s model is less suited to the core principles of decentralized finance (DeFi) and pointed out that BitGo’s solution is more secure due to the division of keys and the lack of centralized control. Additionally, Belshe noted that Coinbase’s delisting of wBTC could have commercial motivations, as the platform seeks to dominate the Bitcoin-related product market.
Coinbase is now under scrutiny from the community, and discussions around centralization and the security of crypto custody are intensifying.
