Coinbase Cites Justin Sun Concerns in WBTC Delisting Decision

The delisting of WBTC was deemed a necessary measure to protect Coinbase and its users from risks associated with the project’s ties to Tron founder Justin Sun. This was stated by the exchange’s lawyers on December 17, as per their announcement.

According to the platform’s latest arguments, the issue lies in the token’s connection to Sun. The lawyers noted that Coinbase had not received sufficient information regarding the entrepreneur’s role and influence in BiT Global. 

They explained that this posed a potential threat to the exchange’s clients, leading to the asset’s delisting due to non-compliance with security standards.

On August 9, Sun-controlled firm BiT Global became a custodian of WBTC reserves alongside BitGo. The partnership raised concerns within the community. Experts pointed out that companies associated with Sun have faced transparency issues. At the time, the Tron founder assured that WBTC would remain unchanged and that he did not have direct access to the funds.

Furthermore, on March 22, 2023, the SEC accused Sun and his three companies, Tron Foundation, BitTorrent Foundation, and Rainberry (formerly BitTorrent), of unregistered securities offerings.

On November 19, 2024, Coinbase announced the exclusion of WBTC, citing the asset’s non-compliance with platform standards without providing further details. 

On December 13, BiT Global filed a lawsuit against the exchange. The platform was accused of unfair delisting to promote its own token, cbBTC. BiT Global claimed this resulted in financial and reputational damage to the project.

Coinbase’s lawyers argued that BiT Global’s claims of financial losses were unfounded, as the platform accounted for less than 1% of the global trading volume of WBTC. They also denied any reputational damage.

The community criticized Coinbase’s stance. Some commentators argued that the exchange did not provide clear reasons for the delisting and was interested in promoting its own asset. 

I’m no Justin Sun fan, I think he’s a grifter

But they fail to articulate why wBTC deserves to be delisted. To me, it’s clear their explanation is bullshit, and the real reason they delisted wBTC was to eliminate competition to cbBTC https://t.co/0wQXeALPLP

— Pledditor (@Pledditor) December 17, 2024

“I’m no fan of Justin Sun, I think he’s a grifter. But [Coinbase] failed to explain why WBTC deserves delisting. To me, it’s obvious their arguments are nonsense, and the real reason was to eliminate competition with cbBTC,” said a user on X.

Others believed the exchange provided a reasonable justification.

For wBTC or any other wrapped BTC, the only ‘premium’ they offer is trust in their governance and reputation.

If they see association risk as a threat to that, delisting becomes a logical decision no?

That said, it’s fair to note this also benefits their competing product.

— boomerf3tt (@boomerf3tt) December 17, 2024

“The only advantage of WBTC or any other wrapped Bitcoin is trust in their management and reputation. If [Coinbase] sees a threat in Sun’s association with the project, then delisting becomes a logical decision, doesn’t it? But it’s fair to note that this also benefits their competing product,” noted one commentator.

Earlier in December, Coinbase ceased cooperation with law firms employing former SEC officials.