Coinbase may be preparing to launch a new product, specifically a wrapped Bitcoin token.
Two cryptic posts from the US-based cryptocurrency exchange’s official X account containing the words “cbBTC,” followed by a “coming soon,” have prompted this speculation.
Coming soon.
— Coinbase 🛡️ (@coinbase) August 14, 2024
cbBTC.
— Coinbase 🛡️ (@coinbase) August 13, 2024
Also, Jesse Pollak, head of Coinbase’s Layer 2 network Base, expressed enthusiasm for Bitcoin in a recent post on X, stating there are plans to develop a “massive Bitcoin economy” on Base.
Meanwhile, these developments follow a recent controversy involving BitGo, the team behind the current leading Wrapped Bitcoin (WBTC) product, and Tron founder Justin Sun.
On August 9, BitGo announced plans to transfer control of WBTC to a new joint venture consisting of BitGo, Hong Kong-based investment manager BiT Global, and Sun’s Tron ecosystem. However, this move has sparked outrage from the crypto community.
In response to the announcement, Block Analitica (B.A.), a crypto risk management firm, proposed on MakerDAO’s governance forum to halt all new Wrapped Bitcoin (WBTC) debts and stop borrowing against WBTC collateral. B.A. cited concerns about Justin Sun’s involvement in the new WBTC joint venture, deeming it an unacceptable risk.
“We find that Sun’s involvement as a controlling interest in the new WBTC joint venture presents an unacceptable level of risk,”
the firm wrote in the post, which was published on August 10.
In an attempt to alleviate concerns, Sun has addressed the controversy, emphasizing that his role in the new WBTC venture is “strategic” and does not grant him direct access to funds.
BitGo’s CEO, Mike Belshe, has also reportedly addressed the concerns, stating they were valid. Belshe, however, noted that Sun was not part of the new venture’s management team and didn’t have key material access, but he was “materially involved.”
In a separate development, Coinbase is currently facing regulatory challenges in the UK. The country’s top regulator, the Financial Conduct Authority (FCA), has fined the exchange’s UK subsidiary, C.B. Payments Limited (CBPL), £3.5 million for repeatedly breaching regulations designed to prevent it from serving high-risk customers. The FCA noted that these breaches resulted from significant lapses in compliance and oversight that went undetected for nearly two years.
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