Coinbase Faces Monopoly Allegations After Refusing to Support Celo’s Migration to Layer 2

The cryptocurrency exchange Coinbase will not support the transition of the Celo L1 blockchain to the Ethereum ecosystem as a Layer 2 solution, scheduled for January 16, 2025.

The Celo L1 blockchain (Coinbase ticker: CGLD) is migrating to Celo L2 on January 16, 2025.

Coinbase will not support the migration. Due to migration by hard fork, customers must withdraw CGLD from Coinbase by January 13, 2025 to prevent funds becoming inaccessible.

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— Coinbase Assets ?️ (@CoinbaseAssets) November 27, 2024

The platform’s team warned users to withdraw project tokens to avoid irreversible loss. They also noted that they use the ticker CGLD for the asset, whereas other exchanges and wallets use CELO. Coinbase emphasized that coins can be sent to all such addresses.

Co-founder and CEO of cLabs, Marek Olszewski, expressed disappointment with the American platform’s decision.

It’s disheartening that @Coinbase has chosen not to support the Celo L2 upgrade.

This feels like a wrench in Ethereum’s layer-2-centric scaling roadmap.

Why would other EVM-compatible L1s follow suit now?

— Marek | Celo ℓ2 ? (@marek_) November 27, 2024

“This feels like a wrench in Ethereum’s layer-2-centric scaling roadmap. Why would other EVM-compatible L1s follow suit now?” he stated.

Ethereum researcher Anthony Sassano suggested that the exchange faced technical issues and might reconsider its decision in the future.

Coinbase protocol specialist Andrew Allen confirmed that the issue is not with the rejection of the Celo hard fork.

Hey @marek_, I spoke with the team and they will continue looking at options next week.

As it stands, given our resources, supporting the migration isn’t something we have been able to commit to.

Separately, regardless of our ability to support the migration, we plan to…

— Andrew (@ann_droo) November 28, 2024

“As it stands, given our resources, supporting the migration isn’t something we have been able to commit to,” he admitted.

Developers will continue to explore options and will definitely return to supporting Celo as a Layer 2 network, Allen assured.

The decision to transition to Ethereum was made by the project in 2023. In April 2024, Celo developers chose the OP Stack solution from Optimism for deployment.

This was noted by Verda Ventures general partner Alec Witt. He pointed out that the same technology stack is used by Base. He speculated that the blockchain backed by Coinbase is simply supporting it by eliminating a competitor.

@Celo L2 and @base both use @Optimism, why not support @Celo?

The optics of the situation are that @coinbase is using monopolistic centralized power to king make @base in a supposedly decentralized world.@coinbase is an outstanding company with a mission “to increase economic…

— AlexLWitt.eth (@AlexLWitt) November 27, 2024

“The optics of the situation are that Coinbase is using monopolistic centralized power to king make Base in a supposedly decentralized world,” Witt stated.

Verda Ventures investment analyst Amit Chu called it strange that the exchange made a statement regarding Celo at the last minute, although the migration had been known for over a year.

“It’s hard not to wonder if there is a hidden motive,” he added.

Earlier this year, support for Celo was added by the issuers of two major stablecoins — USDT (Tether) and USDC (Circle).