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Coinbase has announced that it will halt trading of Wrapped Bitcoin (WBTC) across all its platforms, including Coinbase.com and Coinbase Prime, starting December 19, 2024. This decision follows a routine asset review, with WBTC’s order books being moved to limit-only mode. Despite the delisting, users will still be able to withdraw WBTC from the exchange, as clarified by Coinbase in a statement on X.
Launched in 2019, WBTC was designed to bring Bitcoin liquidity into decentralized finance (DeFi) ecosystems by tokenizing Bitcoin. The token is pegged 1:1 to Bitcoin and currently has a market capitalization of over $13.6 billion. BitGo, the main custodian of WBTC, has traditionally overseen the Bitcoin reserves backing the token.
BitGo controversy
The recent developments surrounding BitGo have raised significant concerns within the crypto industry, particularly regarding changes in the governance of the Wrapped Bitcoin (WBTC) protocol. In August, BitGo entered into a joint venture with BiTGlobal, a trust company based in Hong Kong that has ties to Justin Sun, the founder of TRON. This collaboration, which aims to increase geographical decentralization, has led to increased scrutiny over Sun’s growing influence in the management of WBTC. As a result, many crypto projects are re-evaluating their interactions with WBTC, fearing potential governance risks associated with this new partnership.
Coinbase’s decision to suspend WBTC trading aligns with the growing prominence of its own tokenized Bitcoin product, cbBTC, which launched earlier this year. With a market cap of $1.5 billion, cbBTC is positioning itself as a strong competitor in the wrapped Bitcoin space, which could be contributing to Coinbase’s move to distance itself from WBTC.
WBTC’s response
The team behind Wrapped Bitcoin (WBTC) expressed surprise and disappointment regarding Coinbase’s decision to delist the asset, which was announced on X. In response, they emphasized their ongoing commitment to compliance, transparency, and decentralization. The WBTC team highlighted their robust governance framework, secure custody practices, and strict adherence to regulatory standards, asserting that WBTC remains the most decentralized wrapped Bitcoin solution available in the market.
In an effort to resolve the situation, the WBTC team has urged Coinbase to reconsider its decision. They have also offered to provide additional information or clarification to address any concerns the exchange may have.
