Coinbase Says It Nixed wBTC Because Justin Sun Posed 'Unacceptable Risk'

Coinbase delisted wBTC "due to the unacceptable risk" that the apical bitcoin stand-in connected Ethereum "would autumn into the hands of Justin Sun," the speech said Tuesday successful response to a lawsuit implicit its decision.

Market observers had antecedently work betwixt the lines of Coinbase's November nixing of wBTC. At the time, the speech cited its listing standards arsenic the crushed for the determination without elaborating. Last week, wBTC's issuer BiT Global filed a wide-ranging suit accusing Coinbase of improperly favoring its competing asset, cbBTC.

But successful a 25-page response, Coinbase said the determination had everything to bash with Justin Sun, the crypto billionaire and laminitis of the Tron blockchain, who is besides accused of fraud and marketplace manipulation successful the United States. Sun became associated with wBTC via a concern announced successful August, according to Coinbase's filing.

"Coinbase—like galore others successful the industry—had superior questions astir whether BiT could beryllium a reliable steward fixed Mr. Sun’s involvement," the speech said.

Coinbase initiated a reappraisal of wBTC aft the partnership's unveiling. It asked BiT questions astir its ownership and Sun's suspected involvement, but the steadfast "refused" to reply them, Coinbase's filing said.

"At the decision of its diligence, Coinbase concluded that Mr. Sun’s affiliation with—and imaginable power over—wBTC presented an unacceptable hazard to its customers and the integrity of its exchange," the filing said.

Whether Sun has immoderate engagement with BiT remains unclear. Lawyers for BiT Global did not instantly instrumentality a petition for comment. Neither did representatives of Tron.

But the specified quality of a transportation was capable to spook Coinbase into cutting ties, it said.

"No instrumentality supports BiT’s claims—and surely nary compels Coinbase to big an plus connected its speech that is present connected to an idiosyncratic with a agelong past of alleged fraud and marketplace manipulation," the filing said.