Coinbase, the largest cryptocurrency exchange in the United States, has announced that it will suspend trading of Wrapped Bitcoin (wBTC) starting December 19.
The decision is part of Coinbase’s routine asset reviews to ensure listed tokens meet its standards. This development follows increased scrutiny over Justin Sun’s growing influence in the wBTC protocol after BitGo entered a joint venture with BiT Global.
The suspension is significant for wBTC, the largest tokenized Bitcoin asset in the crypto market. Launched in 2019, wBTC bridges Bitcoin with decentralized finance (DeFi) applications by tokenizing BTC on Ethereum and other blockchain networks. The token is backed 1:1 by Bitcoin and holds a market cap exceeding $13.4 billion.
Trading suspension details
Coinbase stated that it will halt trading of wBTC on both its Coinbase Exchange and Coinbase Prime platforms, affecting both simple and advanced trade features. According to an announcement on the company’s X account, the decision aligns with Coinbase’s commitment to reviewing and maintaining high listing standards.
The exchange emphasized that wBTC funds will remain accessible to users, who can withdraw their holdings anytime. Additionally, wBTC order books have been shifted to a limit-only mode, where users can place or cancel limit orders. Matches may still occur within the limit-only framework. At the time of the announcement, wBTC was trading at an average price of $92,223, with its 24-hour trading volume increasing by 2% to $494 million.
Concerns over Justin Sun’s role
The suspension has raised speculation about Coinbase’s stance on Justin Sun’s influence in the tokenized Bitcoin ecosystem. The controversy began in August when BitGo partnered with Sun and BiT Global to manage wBTC custody. This move sparked debate in the crypto industry, with concerns mounting over potential centralization.
Coinbase and Kraken had earlier introduced rival tokenized Bitcoin products. Meanwhile, Threshold Network’s bid to acquire wBTC failed. According to analysts, Sun had criticized Coinbase’s cbBTC token for lacking proof-of-reserves, though his own BTC-on-Tron token also faces similar concerns.
Whale activity and market impact
The news coincided with a significant wBTC sell-off by a whale investor. Blockchain data shows the whale sold 562.2 wBTC for $52.3 million, locking in a $6.83 million profit in just nine days. The same trader previously sold 619 wBTC between November 6 and November 8 for $46.5 million, earning $8.85 million in profit.
The whale later repurchased 562 wBTC at $80,895 but sold them again at Bitcoin’s record-high price of $94,002, securing additional gains. Analysts believe this trading activity reflects the heightened volatility around wBTC as it approaches its delisting from Coinbase.