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Coinbase CEO Brian Armstrong hit back at Tron founder Justin Sun, who called the launch of Coinbase’s new cbBTC token a “dark day for Bitcoin.”
Sun criticized cbBTC in a <a href="https://x.com/justinsuntron/status/1834242086079750335" rel="noopener noreferrer nofollow">Sept. 12 post on X</a> for lacking Proof of Reserves, audits, and having the potential to freeze user balances. He derided it as a “trust me” system and warned that a US government subpoena could allow authorities to seize the underlying Bitcoin.
“There’s no better representation of central bank Bitcoin than this,” he said.
Armstrong responded in a <a href="https://x.com/brian_armstrong/status/1835022703570702490" rel="noopener noreferrer nofollow">Sept. 14 post on X</a>, defending Coinbase’s transparency about cbBTC and its centralized nature. He pointed out that Coinbase has always been clear about being the custodian of the underlying Bitcoin.
“Not sure what this is all about, TBH,” he said. ”As for cbBTC yes you’re trusting a centralized custodian to store the underlying BTC – we’ve never claimed otherwise.”
<img decoding="async" src="https://static.news.bitcoin.com/wp-content/uploads/2020/06/CSs6Fxa4-66-of-coinbase-users-willing-to-leave-the-exchange-due-to-mounting-privacy-concerns.jpg" alt="66% of Coinbase Users Willing to Leave the Exchange Due to Mounting Privacy Concerns – Exchanges Bitcoin News">
<h2 id="span-style-font-weight-400-coinbase-believes-cbbtc-will-grant-access-to-defi-for-millions-of-btc-holders-span">Coinbase Believes cbBTC Will Grant Access To DeFi For “Millions Of BTC Holders”</h2>
From a technical perspective, cbBTC will serve as a wrapped version of Bitcoin that will compete with <a href="https://coinmarketcap.com/currencies/wrapped-bitcoin/" rel="noopener noreferrer nofollow">Wrapped Bitcoin (WBTC)</a>, which currently has a market cap of over $8.9 billion.
Coinbase announced the launch of cbBTC on Sept. 12. The company said that the token follows the ERC-20 standard and is backed 1:1 by BTC that is held by Coinbase. 
According to the announcement, the new crypto will enable “millions of BTC holders” to securely access DeFi (decentralized finance) applications hosted on the layer-2 <a href="https://insidebitcoins.com/news/base-network-records-over-1-million-daily-active-addresses-following-basenames-surge" rel="noopener noreferrer nofollow">Base</a> network.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 cbBTC is onchain.
 cbBTC is an ERC20 token that is backed 1:1 by Bitcoin (BTC) held by Coinbase.
 This means millions of BTC holders can now securely access DeFi apps on <a href="https://twitter.com/base?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">@base</a> and Ethereum ecosystems—with more chains coming soon.
 Here’s what you need to know ↓ <a href="https://t.co/nF8mF3JGms" rel="noopener noreferrer nofollow">pic.twitter.com/nF8mF3JGms</a>
 — Coinbase 🛡️ (@coinbase) <a href="https://twitter.com/coinbase/status/1834208544247144949?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 12, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<h2 id="span-style-font-weight-400-armstrong-addresses-etf-iou-rumors-span">Armstrong Addresses ETF IOU Rumors</h2>
Amid Sun’s <a href="https://insidebitcoins.com/news/coinbase-wrapped-btc-price-prediction-cbbtc-climbs-1-as-traders-rush-to-buy-this-ico-with-a-1195-apy" rel="noopener noreferrer nofollow">cbBTC</a> remarks, rumors that Coinbase is writing Bitcoin IOUs for BlackRock and suppressing the market leader’s price have also started to circulate on X.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Whatever Coinbase is or isn’t doing, rest assured the ETFs 100% own underlying btc….
 It’s real. And it’s spectacular.
 That simple. Period. End of story.
 Heard same thing back in the day w/ physical gold ETFs.
 Anyone perpetuating this stuff doesn’t understand how ETFs work. <a href="https://t.co/1msZXUbevn" rel="noopener noreferrer nofollow">https://t.co/1msZXUbevn</a>
 — Nate Geraci (@NateGeraci) <a href="https://twitter.com/NateGeraci/status/1835081874563125390?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 14, 2024</a>
</blockquote>
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Armstrong addressed these concerns in his response to Sun as well, and said that all of the ETF (exchange-traded fund) mints and burns Coinbase processes are “ultimately settled onchain.”
Institutional clients do, however, have trade financing and OTC (over-the-counter) options before their trades are settled on the blockchain within 1 business day.
Armstrong said that anyone who wants to see audits of the exchange’s transactions can refer to the annual audits conducted by the reputable accounting firm Deloitte.
 He went on to say that it’s not Coinbase’s place to share the addresses that belong to their institutional clients, who he doubts will “want people dusting all their addresses.”
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Coinbase CEO Brian Armstrong Hits Back at Justin Sun After Tron Founder Calls cbBTC Launch A “Dark Day for Bitcoin”

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