Coinbase Will Stop Trading Wrapped Bitcoin (WBTC)

Due to the cryptocurrency’s failure to meet listing requirements, Coinbase has declared that it will stop trading Wrapped Bitcoin (WBTC) on December 19, 2024, for unspecified reasons. This choice, which Coinbase announced in a post on X on November 19, demonstrates the company’s dedication to regularly checking its listed assets to make sure they adhere to its operational standards.

Using blockchain networks like Ethereum, Wrapped Bitcoin (WBTC) is a tokenized form of Bitcoin that preserves its value representation while enabling users to interact with decentralized finance (DeFi) protocols. WBTC trading will be blocked on Coinbase.com (Simple and Advanced Trade), Coinbase Exchange, and Coinbase Prime despite its widespread use. Users will still be able to access and withdraw their WBTC funds at any moment, though.

According to DefiLlama, WBTC is presently the most popular Bitcoin wrapper, with a total value locked (TVL) of almost $13 billion. Its supremacy is currently being contested, though. Coinbase Wrapped Bitcoin (cbBTC), the company’s own Bitcoin wrapper, was launched in September 2024 and has since grown significantly, with $1.4 billion in TVL, according to CoinMarketCap.

Coinbase came under fire earlier this year for supposedly falling behind other Bitcoin wrappers in terms of openness. Furthermore, baseless claims circulated that Coinbase had given unbacked Bitcoin IOUs to cryptocurrency exchange-traded fund (ETF) sponsor BlackRock. Verifiable proof of reserves for cbBTC will be added by Coinbase in order to allay these worries about transparency, bolster platform confidence, and advertise its tokenized Bitcoin solution.

Amidst the issue surrounding the custodial administration of its Bitcoin holdings, WBTC trading has been suspended. BitGo, the custodian that supports WBTC, gave Hong Kong-based cryptocurrency exchange BiT Global partial ownership of its multi-signature wallet in August. The involvement of Justin Sun, a well-known individual whose related initiatives have been accused of possible collateral mismanagement, raised questions about this move.

Implications and Outlook

The WBTC team was surprised and disappointed by Coinbase’s choice. They encouraged Coinbase to reevaluate its delisting decision and reiterated in a statement their commitment to offering a decentralized, transparent, and compliant Bitcoin tokenization solution.

This action demonstrates Coinbase’s changing approach in the competitive Bitcoin wrapping market. Coinbase may be indicating a move away from third-party solutions and toward backing its currency by endorsing cbBTC.

Users who possess WBTC on Coinbase are encouraged to watch their holdings and look into other platforms or withdrawal methods as the December 19 suspension date draws near. This development also brings to light more general issues with competition, governance, and transparency in the DeFi ecosystem.

Make money without lifting your fingers: Start using a world-class auto trading solution