BiT Global Accuses Coinbase of Delisting wBTC to Gain Competitive Edge for cbBTC

BiT Global has accused Coinbase of delisting Wrapped Bitcoin (wBTC) from its platform in an attempt to give its own Bitcoin wrapper, Coinbase Wrapped BTC (cbBTC), a “competitive advantage.” This comes after Coinbase announced plans to suspend trading of wBTC in December, citing the token’s failure to meet the exchange's standards for listing.

On November 19, Coinbase revealed that it would cease trading wBTC on December 19, 2024, following a standard review process to assess the suitability of assets for trading. The exchange emphasized that its decision was not aimed at promoting its own wrapped Bitcoin product, cbBTC, but was instead based on a customary evaluation of wBTC’s compliance with Coinbase’s listing standards.

However, BiT Global, the custodian of wBTC, responded by alleging that Coinbase’s decision was strategically motivated. A spokesperson from BiT Global stated, “It’s clear that Coinbase’s decision is an attempt to gain a competitive advantage, pushing forward their own wrapped Bitcoin product, cbBTC, and removing the largest and most influential competitor in wBTC.” BiT Global further argued that Coinbase’s delisting of wBTC would strip investors of the choice between the two Bitcoin wrappers, thereby favoring Coinbase’s offering.

Coinbase, on the other hand, firmly rejected these claims. A Coinbase spokesperson told Cointelegraph, “Claims that Coinbase is delisting wBTC to gain market share for Coinbase’s wrapped bitcoin cbBTC are wrong. Each asset is reviewed independently of each other, and each must independently maintain compliance with Coinbase’s listing standards. wBTC no longer meets Coinbase listing standards.” The exchange also pointed out that it had already stopped facilitating market trades of wBTC and was only allowing limit orders to be placed.

The Competition Between Bitcoin Wrappers

Bitcoin wrappers, like wBTC and cbBTC, are tokens that represent Bitcoin (BTC) on other blockchain networks, allowing users to use Bitcoin in decentralized applications (DeFi) and other blockchain-based ecosystems. Wrapped Bitcoin has been the leading Bitcoin wrapper, with over $14 billion in total value locked (TVL), according to DefiLlama. Launched in September 2024, Coinbase’s cbBTC has quickly gained traction, amassing approximately $1.5 billion in TVL, and has positioned itself as a strong competitor to wBTC.

The rivalry between these two Bitcoin wrappers intensified after BitGo, the custodian holding wBTC’s Bitcoin reserves, granted Hong Kong-based BiT Global partial control over the multisignature wallet that holds the Bitcoin backing wBTC. This decision raised eyebrows in the crypto community, particularly due to the involvement of Justin Sun, a figure known for his ties to several controversial projects. Some have raised concerns about the security of collateral backing wBTC, with Threshold, a rival Bitcoin wrapper, expressing worries about potential mismanagement of assets.

Investor Reactions

BiT Global contends that investors should have the freedom to choose which Bitcoin wrapper best suits their needs, whether it be wBTC or cbBTC. The company argues that Coinbase’s decision to delist wBTC undermines this freedom and could limit options for investors looking to participate in DeFi ecosystems using Bitcoin.

Despite the ongoing debate, the competition between wBTC and cbBTC highlights the growing importance of Bitcoin-backed tokens in the evolving world of decentralized finance. With over $15 billion in total value locked between the two products, the race to dominate the Bitcoin wrapper market is intensifying, with each project vying for a larger share of the DeFi space.

As the situation unfolds, both wBTC and cbBTC are likely to remain at the center of discussions around the future of Bitcoin in DeFi, and the influence of major exchanges like Coinbase will continue to shape the landscape for Bitcoin-backed tokens.