Coinbase has announced that it will suspend trading of Wrapped Bitcoin (WBTC) on December 19, 2024, at approximately 12 p.m. ET. The decision, shared on November 19 through the company’s official X account, was attributed to WBTC no longer meeting the cryptocurrency exchange’s listing standards.
“We regularly monitor the assets on our exchange to ensure they meet our listing standards,” Coinbase stated.
As of now, the platform has discontinued market trading for WBTC, with only limit orders being facilitated.
Impacts on Coinbase Platforms
The trading suspension will affect all Coinbase platforms, including Coinbase.com (both Simple and Advanced Trade), Coinbase Exchange, and Coinbase Prime. Despite the suspension, Coinbase assured users that their WBTC funds will remain accessible, and withdrawals can be made at any time.
Wrapped Bitcoin is a tokenized version of Bitcoin, allowing BTC to be used on other blockchain networks, particularly Ethereum. It is backed 1:1 by Bitcoin held in custody, enabling interoperability with decentralised finance (DeFi) platforms.
BitGo’s Controversial Custody Transfer
In August, BitGo, the primary custodian for WBTC, transferred partial control of the Bitcoin collateral to Hong Kong-based BiT Global. This move stirred controversy due to the involvement of Justin Sun, with critics raising concerns about potential misuse of collateral in his affiliated projects. Threshold, a competitor in the Bitcoin wrapper space, highlighted these issues, citing “worrying signs of possible misappropriation” of the underlying assets.
Community Reactions and WBTC’s Market Position
The decision to delist WBTC has sparked disappointment within the community. In a statement released on November 19, Wrapped Bitcoin expressed regret over Coinbase’s decision.
“We regret and are surprised by Coinbase’s decision to delist WBTC,” the project said. “We have always been committed to providing the community with the most compliant, transparent, and decentralised BTC tokenization product. We urge Coinbase to reconsider this decision and continue supporting WBTC trading.”
Despite the controversy, WBTC remains the most popular Bitcoin wrapper, with over $13 billion in total value locked (TVL), according to DefiLlama.
