BiT Global has accused Coinbase of suspending trading of Wrapped Bitcoin (wBTC) on Dec. 19 to boost its own Bitcoin wrapper, Coinbase Wrapped BTC (cbBTC).
BiT Global has accused Coinbase of suspending trading of Wrapped Bitcoin (wBTC) on Dec. 19 to boost its own Bitcoin wrapper, Coinbase Wrapped BTC (cbBTC). The Hong Kong-based exchange, which recently gained partial control over wBTC’s Bitcoin custodian, claims that Coinbase’s decision aims to eliminate competition for cbBTC, which launched in September.
The delisting of wBTC, the most popular Bitcoin wrapper with over $14 billion in total value locked (TVL), follows a statement from Coinbase on Nov. 19 citing “failures to meet listing standards.” However, BiT Global argues that this move is a strategy to favor Coinbase’s new wrapped Bitcoin product, cbBTC. “It’s clear that Coinbase is pushing forward their own wrapped Bitcoin product while removing wBTC, the largest competitor,” said a spokesperson from BiT Global.
Coinbase has denied these claims. A Coinbase spokesperson stated that the delisting was based on a regular review process. “Each asset is reviewed independently to meet our listing standards. wBTC no longer meets these standards,” they said.
Bitcoin wrappers like wBTC and cbBTC are used to represent Bitcoin on other blockchain networks, allowing for broader use in decentralized finance (DeFi). Despite the dispute, wBTC remains the dominant player in the market, while Coinbase’s cbBTC has also gained traction, currently holding $1.5 billion in TVL.
The situation has been further complicated by BiT Global’s recent involvement with wBTC’s custodian, BitGo. In August, BitGo allowed BiT Global partial control of the multisignature wallet securing wBTC’s Bitcoin backing. The move raised concerns due to the involvement of Justin Sun, a figure known for controversies in the crypto space. Some in the community have voiced worries about the potential mismanagement of funds in projects associated with Sun, including BiT Global.
Coinbase’s decision to delist wBTC has drawn criticism from some corners of the crypto community. BiT Global insists that this move strips investors of their right to choose the Bitcoin wrapper that best suits their needs. "Coinbase has elected to strip investors of that decision," the spokesperson added.
Although wBTC still leads the market, with a larger TVL than cbBTC, the competition between the two Bitcoin wrappers is intensifying. This comes as Coinbase CEO Brian Armstrong is scheduled to meet with President-elect Donald Trump to discuss possible appointments and policies that could influence the cryptocurrency market.
As the debate around wrapped Bitcoin continues, industry stakeholders remain divided on whether Coinbase’s actions will shape the future of Bitcoin representation in DeFi.
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