Trump-Backed World Liberty Financial Swaps Its cbBTC for WBTC After Sun Joins as Adviser

What to know:

As a seasoned crypto investor with over a decade of experience in this dynamic and ever-evolving market, I find the recent moves by World Liberty Financial, backed by the Trump family, intriguing. The swap of $10 million worth of Coinbase’s cbBTC for WBTC raises several questions about the underlying strategies and motivations of these influential players.

On Wednesday, World Liberty Financial – a company supported by the family of the newly elected U.S. President Donald Trump – swapped approximately $10 million in Coinbase’s (COIN) equivalent of Bitcoin, known as cbBTC, for an alternative version called WBTC from a competing platform.

Wrapped bitcoin is a form of the world’s largest cryptocurrency that can be used in decentralized finance (DeFi) on blockchains other than Bitcoin.

As an analyst, I’d rephrase it as follows:

There’s one more link in the chain: Justin Sun, the founder of the Tron blockchain and one of CoinDesk’s Most Influential 2024. In its defense, Coinbase cited BiT Global’s links to Sun, who has been accused of fraud and market manipulation in the U.S., as an “unacceptable risk.” Sun, who denies the accusations, also became an adviser to World Liberty Financial, a position he gained after picking up a $30 million stake in the platform last month in exchange for WLFI tokens.

World Liberty Finance has yet to clearly communicate its intention to exchange the tokens. However, on-chain records indicate that the company has been actively participating in the market over the past week, acquiring millions of dollars worth of Aave (AAVE), Chainlink’s LINK, and Ethena’s ENA tokens. These companies are associated with World Liberty Finance through partnerships or integrations.

The sun does not have a significant direct role in WBTC. In August, BitGo, initially and for a long time responsible for the custody of the bitcoin associated with WBTC, announced that it would transfer control over the project’s custody from a single entity to three global entities (including BiT Global) to foster decentralization within the operation.

As a researcher, I’ve come across an interesting entity known as BiT Global, which operates as a Trust and Company Service Provider (TCSP) based in Hong Kong. Interestingly, it’s not just a standalone entity; it’s actually a collaborative venture, forged by BitGo, Justin Sun, and the broader Tron ecosystem, as per the information disclosed in their August release.

In a October interview, Board Member Robert Liu stated that neither the sun nor any of its indirect affiliations play a role in the ownership structure or the stock ownership of companies under consideration, or the shareholders listed with BiT Global.

According to certain board members, it could be advantageous for WBTC to have Sun’s influence, considering the prosperity of projects like Tron, crypto exchange HTX, and other ventures under his leadership.

According to Liu, the Tron blockchain controls over half of the worldwide market share. This makes it the leader in terms of transaction volume. Consequently, it’s not surprising that approximately $60 billion worth of stablecoin assets are being held on the Tron blockchain.

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2024-12-19 12:48