Coinbase has initiated the process of removing Wrapped Bitcoin from its platform, citing non-compliance with its listing standards. The exchange conducts regular reviews to ensure assets meet its requirements, and as a result, trading for wBTC will be suspended on December 19, 2024.
Wrapped Bitcoin, a token representing bitcoin on the Ethereum blockchain and other networks, is provided by BitGo. However, similar products offer the same concept, with custodied cryptocurrency on one end and a token representation on a non-native blockchain on the other.
This decision comes shortly after Coinbase introduced its version of wrapped bitcoin, called cbBTC, on the Base blockchain. Recently, wBTC has faced significant scrutiny following BitGo's announcement of a joint venture with BiT Global, a custodian partially owned by Justin Sun. Although many in the crypto community have expressed concerns over Sun's involvement, BitGo CEO Mike Belshe has emphasized that Sun has minimal operational control due to the custodian's legal structure, which limits individual ownership to 20%, and the keys are split among multiple parties.
Belshe has criticized those who oppose the BitGo-BiT Global partnership, suggesting they are promoting their own interests rather than providing thoughtful criticism of wBTC. In a previous interview, Belshe stated that as a fiduciary, it is BitGo's duty to protect assets, regardless of where they are held, and he questioned the centralization of Coinbase's cbBTC. Belshe believes this level of centralization is contradictory to the principles of decentralized finance and has expressed concerns that if the DeFi community chooses a centralized entity like Coinbase as its steward, it would undermine the very essence of DeFi.