Thomas Daniels
Justin Sun Supports World Liberty Financial’s Decision to Use wBTC Rather Than cbBTC
Justin Sun, the founder of TRON, has been quite critical of World Liberty Financial’s recent decision to use Wrapped Bitcoin (wBTC) rather than Coinbase’s cbBTC, accusing Coinbase of having “unreliable custody practices.” The action also demonstrates the growing competition between the vocal blockchain entrepreneur and the cryptocurrency exchange.
In a January 23 post on X (previously Twitter), Sun criticized Coinbase’s centralized approach to Bitcoin custody while endorsing wBTC, a tokenized Bitcoin product offered by BitGo. He warned users: “Not your keys, not your coins!” and asserted that depending on cbBTC could result in frozen or confiscated reserves.
Additionally, Sun said that Coinbase may engage in discriminatory business practices, implying that access to funds may be contingent on connections with the exchange’s legal staff. Coinbase had not yet addressed these claims at the time of publication.
The Strategic Transition of WLF to wBTC
According to reports, a sizable amount of the reserves of World Liberty Financial (WLF), a financial company connected to former US President Donald Trump, have been invested in wBTC. According to Arkham Intelligence data, WLF has $56.4 million in wBTC and more than $181 million in Ethereum (ETH) in its assets; there is no indication that it has any cbBTC.
This change follows BitGo’s stepped-up cooperation with Sun. Sun revealed intentions in late 2024 to administer wBTC goods through a joint venture with BitGo and BiT Global, a division of Bithumb. The collaboration cemented Sun’s dominance in the wBTC ecosystem while also casting doubt on BitGo’s operational independence.
Coinbase Faces Criticism
Sun criticized Coinbase for its proof-of-reserves system, claiming it lacked the dependability and transparency of decentralized alternatives. He highlighted possible hazards in Coinbase’s custodial services and underlined that customers should prioritize decentralized ownership to protect their funds.
A larger industry discussion concerning centralized versus decentralized solutions for tokenized Bitcoin products is reflected in the battle between wBTC and cbBTC. Critics like Sun contend that despite Coinbase’s promotion of cbBTC as a safe, exchange-backed alternative, it presents serious hazards to customers looking for real asset sovereignty.
Wider Consequences
WLF’s adoption of wBTC highlights the cryptocurrency industry’s growing mistrust of centralized custody solutions. Coinbase may come under increased pressure to address issues with user control and transparency as institutional actors place a greater emphasis on decentralized products.
The argument over Bitcoin tokenization is expected to heat up as a result of World Liberty Financial’s alignment with wBTC, which might change the dynamics of the market in 2025.
