Coinbase to Phase Out Wrapped Bitcoin Trading

Coinbase has initiated the process of delisting Wrapped Bitcoin (WBTC). The exchange has already suspended market trading for WBTC, limiting users to placing only limit orders. This move signifies a significant shift in Coinbase’s strategy and its approach to cryptocurrency listings.

Coinbase Delists Wrapped Bitcoin (WBTC) Amidst Compliance Concerns
In a move that surprised many, cryptocurrency exchange Coinbase announced it would delist Wrapped Bitcoin (WBTC) on December 19th, 2024. The decision reportedly stems from concerns about WBTC’s compliance with Coinbase’s listing standards, though the exchange did not disclose specifics.

This news comes after controversy erupted in August when BitGo, the custodian holding WBTC’s Bitcoin reserves, granted partial control of the multisignature wallet to Hong Kong exchange BiT Global. This move raised red flags within the crypto community, particularly due to concerns surrounding figures associated with BiT Global.

Despite the delisting, Coinbase assured users their WBTC holdings remain secure and can be withdrawn at any time.

While WBTC currently holds the top spot for popularity among Bitcoin wrappers, with over $13 billion in locked value, Wrapped BTC expressed disappointment with Coinbase’s decision. They emphasized their commitment to transparency and compliance and urged Coinbase to reconsider.

The delisting affects trading across all Coinbase platforms, including their website and professional trading services.

Coinbase’s entry into the Bitcoin wrapping market with Coinbase Wrapped BTC (cbBTC) in September 2023 has sparked significant interest. The platform quickly gained traction, amassing over $1.4 billion in total value locked (TVL) as of December 2023.
However, Coinbase’s foray into the wrapped Bitcoin space wasn’t without its challenges. In its early stages, the exchange faced criticism for perceived transparency shortcomings compared to its competitors. Additionally, unfounded rumors circulated that Coinbase was issuing unbacked Bitcoin IOUs to BlackRock, a prominent crypto ETF sponsor.

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