Coinbase to Delist Wrapped Bitcoin In December

Coinbase, the largest U.S. crypto exchange, announced it would suspend trading for Wrapped Bitcoin (WBTC), the largest Bitcoin-backed ERC-20 token, from December 19.

Coinbase announced the news on Nov. 19, asserting that WBTC no longer meets its listing standards.

“We regularly monitor the assets on our exchange to ensure they meet our listing standards,” Coinbase tweeted. “Based on our most recent review, Coinbase will suspend trading for wBTC (wBTC) on December 19, 2024, on or around 12 pm ET… Your wBTC funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time.”

Trading for WBTC has already shifted to limit-only mode, allowing users to place or cancel limit orders but preventing market trades. The suspension will affect each of the company’s Coinbase.com, Coinbase Pro, and Coinbase Prime platforms.

The WBTC team expressed disappointment over Coinbase’s decision.

“We regret and are surprised by Coinbase’s decision to delist WBTC,” Wrapped Bitcoin said. “We have always been committed to providing the community with the most compliant, transparent, and decentralized BTC tokenization product. We urge Coinbase to reconsider this decision and continue supporting WBTC trading.”

Wrapped Bitcoin (WBTC) is an ERC-20 token backed by BTC, allowing users to access the value of their Bitcoin holdings on Ethereum Virtual Machine (EVM)-compatible networks.

BTC’s market cap is roughly $13.5 billion, equating to roughly 0.74% of Bitcoin’s market capitalization.

WBTC's controversial restructure

Coinbase’s decision to delist WBTC follows the company launching its own BItcoin-backed ERC-20 token, Coinbase Wrapped Bitcoin (cbBTC) in September. CbBTC quickly gained traction and amassed a total value locked (TVL) of $1.4 billion within months.

ClbBTC’s reserves are held by Coinbase. The token is currently live on Ethereum, Base, and Solana — where it takes the form of a Solana-based SPL token — with plans to deploy on other chains at a later date.

Coinbase deployed cbBTC in response to Wrapped Bitcoin facing scrutiny over a pending corporate restructure announced in August.

BitGo, the company behind Wrapped Bitcoin and custodian managing WBTC’s Bitcoin reserves, transferred control over the protocol to a joint venture operated in partnership with BiT Global, a digital asset custodian, with involvement from Justin Sun, the controversial founder of Tron. The restructure was completed in early October.

Critics raised alarms that the restructuring would result in reduced transparency surrounding the management of WBTC’s reserves. BA Labs, a risk assessment team, flagged that TrueUSD, Huobi BTC, HUSD, and USDD all suffered depegs after becoming associated with Sun, including the failure of HBTC and HUSD.

In September, the U.S. Securities and Exchange Commission settled with TrustToken Inc., the company behind TrueUSD, alleging that TUSD was misrepresented as being marketed as a USD-backed asset despite significant portions of its reserves taking the form of shares in a “risky” speculative fund since it was sold to “an offshore entity” in December 2020.

The SEC found that shares in the fund accounted for more than 99% of TUSD’s reserves by September 2024.