Less than 24 hours after the launch of Coinbase’s wrapped Bitcoin (cbBTC) on the Ethereum and Base chain, Tron founder Justin Sun took to the X platform to grossly criticize the move.
According to the X post, the Tron founder highlighted Coinbase’s wrapped Bitcoin (cbBTC) as central bank Bitcoin – “cbbtc = central bank btc” – emphasizing that the cbBTC poses risks to decentralized finance (DeFi).
Coinbase Launched Wrapped Bitcoin Token (cbBTC) on Ethereum and Base Chain
On Thursday, September 12, 2024, Coinbase cryptocurrency exchange announced the launch of its wrapped Bitcoin (cbBTC) on the Base and Ethereum ecosystems, with plans to expand to other networks soon.
According to Coinbase, “cbBTC is an ERC-20 token and is backed 1:1 by Bitcoin (BTC) tokens held by Coinbase” to foster liquidity and trust in the decentralized finance (DeFi) ecosystem.
The exchange added that the cbBTC would enable customers to access DeFi applications, such as Compound, Morpho, Aave, Curve, and Aerodrome, using their BTC holdings.
Tron Founder Justin Sun Criticizes Coinbase’s Wrapped Bitcoin (cbBTC)
A few hours after Coinbase launched its wrapped Bitcoin (cbBTC), Justin Sun, Tron founder, criticized the wrapped Bitcoin in an X post.
In his post, Sun mentioned the risks associated with the newly launched wrapped Bitcoin. He said that cbBTC.
Lacks audits, lacks Proof of Reserve, can freeze anybody’s balance at any time, can be seized by the US government, and is not different from central bank Bitcoin.” “A dark day for Bitcoin.
A few hours later, the Tron founder posted verbatim that “cbbtc = central bank btc” in another X post, further highlighting the risk involved in combining central banks and Bitcoin, which is detrimental to decentralized finance (DeFi). He taunted that Satoshi Nakamoto, the pseudonym Bitcoin creator, could never have imagined this.
He, however, revealed that he is not in opposition to Coinbase holding BTC or issuing the wrapped BTC. Instead, he is against the approach of centralizing Bitcoin.
Controversy Surrounding Justin Sun And The Rival Product, wBTC
This criticism is coming week after controversy around BitGo’s wrapped Bitcoin (wBTC) token, the largest wrapped Bitcoin version, and the involvement of Justin Sun.
In August, BitGo, the custodian of wBTC, announced plans to have joint custody and control of its wBTC business with BiTGlobal (formerly Bithumb Global), a Hong Kong-based firm that is partially controlled by Justin Sun. The partnership requires BitGlobal and BitGo to share control of keys to the custody.
Although BitGo CEO Mike Belshe disclosed that wBTC has a decentralized governance structure and Sun has no authority to unilaterally move funds from the jointly controlled system, some stakeholders are concerned about the safety of the BTC and wBTC.
Currently, there are about 152,958 wBTC tokens on the Ethereum network. wBTC has a market capitalization of about $8.8B, which is a 44% drop from its peak.
