Yesterday crypto exchange Coinbase revealed that Wrapped Bitcoin (WBTC) will be suspended from trading from December 19. This WBTC token suspension will span across various products of the crypto exchange including Coinbase Prime and Coinbase.com.
This decision was made after a routine asset review in which Wrapped Bitcoin order books were shifted to limit-only mode. However, the WBTC suspension won't prevent crypto users from withdrawing the token. Traders can still withdraw the digital asset from Coinbase after the delisting.
WBTC was introduced in 2019 as a digital asset that lets Bitcoin liquidity flow into the decentralized finance (DeFi) ecosystem as it tokenizes BTC. It is pegged at a 1.:1 ratio with Bitcoin and has a market capitalization of more than $13.6 billion.
The primary custodian of Wrapped Bitcoin, BitGo has always maintained a BTC reserve but recent change in WBTC protocol governance has caused a lot of concerns in the industry.
Earlier in August, BitGo partnered with Hong Kong-based trust BiTGlobal which is also linked to TRON founder Justin Sun. Through this tie-up, BitGo wanted to enhance geographical decentralization but it triggered scrutiny of Justin Sun’s influence on the WBTC protocol.
This has led to many crypto projects adjusting and minimizing interactions with Wrapped Bitcoin as they fear the governance risk of the protocol.
Crypto exchange Coinbase's announcement comes on the heels of its own Bitcoin tokens, cbBTC capturing a market cap of $1.5 billion. Over the year, cbBTC has emerged as a serious competitor of WBTC in the tokenized Bitcoin market.
The WBTC team has expressed their disappointment at Coinbase's delisting announcement, saying that they are committed to decentralization, transparency and compliance.
The Wrapped Bitcoin team revealed how rigorous their governance protocol is and it adheres to regulations and offers secure custody processes. The team underlined the WBTC’s position as the most decentralized wrapped Bitcoin solution in the crypto market.
The WBTC went on to urge Coinbase to reconsider the delisting move as they are ready to provide any clarification to address concerns raised recently.
As of November 20, Wrapped Bitcoin was up 2.63% in the last 24 hours to trade at $94,508.91 with a 31.64% gain in its trading volume which reached $570.06 million while the market cap rose to $13.84 billion. In the meantime, cbBTC rose 2.36% to trade at $94,501.33 while its trading volume declined 8.81% to reach $181.80 million and its market cap stood at $1.45 billion.