Coinbase (COIN) says it is in the process of removing Wrapped Bitcoin (wBTC) from the exchange citing its “listing standards.”

wBTC is a token that represents bitcoin on ethereum and other blockchains. While wBTC is offered by BitGo, other similar products have the same concept: custodied crypto on one end, and a representation of the token on its non-native blockchain on the other.

This move came shortly after Coinbase announced its own version of wrapped bitcoin called cbBTC, which exists on the Base blockchain.

Recently wBTC has come under a considerable amount of scrutiny after BitGo announced it was entering into a joint venture with BiT Global, a custodian partially owned by Justin Sun.

While many in the crypto community expressed concerns about Sun’s involvement, BitGo CEO Mike Belshe was quick to point out that Sun has minimal operational control over BiT Global – the custodian’s legal structure means that no individual has more than 20% ownership – and the keys are split between multiple parties.

In an earlier interview with CoinDesk, BitGo’s Belshe said that critics of the BitGo-BiT Global tie-up weren’t being “intellectually honest”; promoting their own project’s interests over thoughtful criticism of wBTC.

"We are a fiduciary today, and it’s our duty to ensure that the assets are protected, regardless of where they are held," he said, while taking aim at Coinbase’s ‘cbBTC’ for being, in his opinion, too centralized.

"Of course, the central bank, CB, Coinbase, they also would love to have Wrapped Bitcoin under their belt," he said. "There is no doubt that the model that BitGo is proposing, how we're going to store the keys, is far superior to anything that Coinbase can or would concoct."

Belshe believes this potential level of centralization is antithetical to decentralized finance (DeFi).

“If the DeFi community picks central bank Coinbase as the ultimate steward, then I think all DeFi hope should be lost,” he said.

Source : CoinDesk - Nov 20, 2024