Coinbase Says It Nixed wBTC Because Justin Sun Posed ‘Unacceptable Risk’

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As a seasoned researcher with a keen eye for detail and a background in understanding the intricacies of the crypto world, I find Coinbase’s decision to delist wBTC due to its association with Justin Sun, a controversial figure in the industry, quite plausible.

According to a statement made by Coinbase on Tuesday, they decided to remove wBTC from their platform because they deemed it too risky that this bitcoin substitute on Ethereum might be taken control of by Justin Sun, in light of the ongoing legal dispute concerning their decision.

Previously, market analysts had inferred from Coinbase’s decision to reject wBTC in November that there might have been underlying issues between the two. At that time, Coinbase stated that their listing standards were the reason for the rejection without providing further details. However, last week, wBTC’s issuer Bit Global filed a lawsuit alleging that Coinbase unfairly favored its competing asset, cbBTC.

In my analysis, it appears that the decision I made, as outlined in a comprehensive 25-page document, was primarily influenced by Justin Sun, the affluent cryptocurrency entrepreneur behind Tron blockchain. Notably, Sun is under scrutiny for allegations of fraud and market manipulation within the U.S. jurisdiction. As per our filing, Sun’s connection to wBTC stems from a partnership that was announced in August.

Coinbase, like numerous other businesses within the sector, expressed doubts about whether Mr. Sun was trustworthy enough to manage Bit, as suggested by his association with it. This is their statement.

As a crypto investor, I recently learned that Coinbase initiated an examination of wBTC following our partnership announcement. They posed some inquiries regarding the ownership structure and potential ties with Sun, but regrettably, BiT chose not to respond to these questions, as stated in Coinbase’s official filing.

According to the statement, after thoroughly investigating, Coinbase determined that Mr. Sun’s connection to and possible influence over wBTC posed a high-risk threat to their customers and the trustworthiness of their exchange platform.

As an analyst, I’m unable to definitively say whether Sun is associated with BiT at this point. The legal team of BiT Global hasn’t responded yet to my query for clarification. Similarly, I haven’t received a response from the representatives of Tron regarding this matter.

But the mere appearance of a connection was enough to spook Coinbase into cutting ties, it said.

According to the document, there’s no legislation backing up BiT’s assertions, and absolutely nothing in law requires Coinbase to list an asset on their platform that has been associated with someone known for suspected fraudulent activities and market manipulation in the past.

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2024-12-18 00:22