- Tron founder Justin Sun lambasts Coinbase’s move to launch cbBTC.
- The wrapped asset is prone to get subpoenaed by the U.S. government.
- Coinbase takes a regulator-friendly approach but lacks Proof of Reserve.
The outspoken founder of the Tron (TRX) blockchain, Justin Sun, is firing shots at Coinbase, the leading crypto exchange in the United States. Coinbase’s newly launched Wrapped Bitcoin (cbBTC) has sparked a categorical pushback from Sun, who is himself tied to WBTC.
Sponsored
Emerging as a main competitor to WBTC, Coinbase’s version lacks Proof of Reserves (PoR), which is a popular practice among most major crypto platforms. Sun openly questioned why Coinbase could not implement the same reserve tracking method and called for transparency in the industry.
Tron’s founder emphasized the simplicity of making treasury wallets publicly available. “Any U.S. government subpoena could seize all your BTC. There’s no better representation of central bank Bitcoin than this. It’s a dark day for BTC,” he stated.
Sun Compares Coinbase to FTX
In a follow-up tweet, Sun claimed that the industry feels “puzzled” about Coinbase’s unwillingness to provide the cryptocurrency addresses tied to the platform’s treasury. While Coinbase is known as one of the most regulatory-compliant crypto companies, being on good terms with audit companies doesn’t necessarily mean that massive liquidity crunches can be prevented.
Sun used the FTX crypto exchange as an example. The high-profile exchange crumbled to pieces in November 2022 when condemning proof of its native FTX (FTT) token being minted out of thin air surfaced across social media. Initially uncovered by Binance’s then-CEO Changpeng ‘CZ’ Zhao, the news spread fast, setting off severe panic among crypto enthusiasts.
Moreover, Sun referred to Coinbase Global’s position in the stock market as somewhat dangerous. Signature Bank, a crypto-focused and publicly traded company, went bankrupt in March 2023, and its global market capitalization was significantly higher than Coinbase Global’s.
On the Flipside
- BitGo, the largest custodian of Wrapped Bitcoin (WBTC), announced that it had struck a deal with BiT Global, a Hong Kong-based company with ties to Justin Sun.
- That has sparked concerns among crypto enthusiasts, who claim that the 15th largest digital asset, WBTC, would be prone to centralization once the new partnership goes into effect.
Why This Matters
Wrapped Bitcoin assets rely on intermediaries or custodians, which can make it challenging for this asset type to be used in decentralized finance if no coherent regulation is applied.
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