WBTC coin logo visible through a loope. Source: Casimiro - stock.adobe.com

Key Takeaways:

Coinbase Suspends WBTC: Coinbase will suspend trading of Wrapped Bitcoin (WBTC) on December 19, 2024, citing compliance with its listing standards.
Custody Concerns: BitGo’s recent move to grant partial custody of WBTC reserves to BiT Global, tied to Justin Sun, has raised trust concerns within the community.
Dominance in DeFi: Despite challenges, WBTC remains the leading Bitcoin wrapper, holding over $13 billion in total value locked.

Coinbase will suspend trading for Wrapped Bitcoin (WBTC) starting December 19, 2024, citing a failure to meet its listing standards.

This decision follows a review of listed assets, according to an announcement made on November 19 via X (formerly Twitter).

We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent review, Coinbase will suspend trading for wBTC (wBTC) on December 19, 2024, on or around 12pm ET.
— Coinbase Assets 🛡️ (@CoinbaseAssets) November 19, 2024

Trading of WBTC has already ceased, with Coinbase now limiting transactions to order placements.

The suspension will affect all Coinbase platforms, including Coinbase.com, Coinbase Exchange, and Coinbase Prime.

Despite the halt in trading, users will still be able to access and withdraw their WBTC holdings.

We regret and are surprised by Coinbase’s decision to delist WBTC. As the core team behind Wrapped BTC, we have always been committed to providing the community with the most compliant, transparent, and decentralized BTC tokenization product.

Over the years, WBTC has established…
— WBTC (@WrappedBTC) November 19, 2024

Wrapped Bitcoin, a token representing Bitcoin on non-native blockchain networks, plays a key role in decentralized finance (DeFi) by enabling liquidity and access to Bitcoin-based assets.

However, concerns over custody and governance of WBTC have emerged.

BitGo, the custodian managing WBTC’s Bitcoin reserves, recently granted partial control of its multisignature wallet to BiT Global, a Hong Kong-based exchange linked to controversial crypto figure Justin Sun.

This move has sparked criticism over potential risks of collateral misuse.

Despite these challenges, WBTC remains the dominant Bitcoin wrapper, boasting over $13 billion in total value locked (TVL), according to DeFiLlama.

Rival projects, like Threshold, have highlighted these governance concerns, promoting their alternative solutions.