Coinbase, a leading cryptocurrency exchange, announced it will suspend trading of Wrapped Bitcoin (WBTC), citing the token’s failure to meet its listing standards. WBTC is the most popular Bitcoin wrapper, representing BTC on other blockchain networks, with $13 billion in total value locked (TVL), according to DefiLlama.
Coinbase stated in a Nov. 19 post on X that trading for WBTC will be suspended across all platforms, including Coinbase.com (Simple and Advanced Trade), Coinbase Exchange, and Coinbase Prime, effective Dec. 19, 2024, at 12 pm ET. Trading will be limited to existing limit orders until the suspension date. Users will still be able to access and withdraw their WBTC funds after trading is halted.
The trading suspension will take effect on Dec. 19, 2024, following Coinbase’s review of WBTC’s compliance with its listing standards. The decision comes after ongoing concerns about the custody and management of WBTC’s underlying assets.
The suspension applies to all Coinbase platforms globally, including its consumer and institutional services. WBTC holders can still withdraw their funds but will not be able to trade the token on Coinbase after Dec. 19.
While Coinbase has not disclosed specific reasons, the suspension follows a series of controversies surrounding WBTC. In August, BitGo, the custodian managing WBTC’s underlying Bitcoin, granted partial control of its multisignature wallet to Hong Kong-based exchange BiT Global, raising concerns about transparency and asset management. Threshold, a rival Bitcoin wrapper, criticized the involvement of Justin Sun in the ecosystem, citing fears of potential misappropriation of collateral.
Coinbase’s decision aligns with its launch of Coinbase Wrapped BTC (cbBTC) in September, a competitor to WBTC. cbBTC has gained $1.4 billion in TVL and is backed by Coinbase’s plans to add verifiable proof of reserves, addressing criticisms of transparency in the crypto industry. Wrapped BTC, however, expressed disappointment, urging Coinbase to reconsider and emphasizing its commitment to compliance and decentralization. As Coinbase pivots toward cbBTC, the exchange aims to solidify its position in the BTC tokenization space while enhancing trust with verifiable reserve mechanisms.
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