Justin Sun Warns Coinbase’s Wrapped Bitcoin Could Harm the Market

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Justin Sun’s Concerns

Justin Sun, the founder of Tron blockchain and an advisor to HTX crypto exchange, has raised significant concerns about Coinbase’s newly introduced “wrapped bitcoin” (cbBTC). According to Sun, this ERC-20 token variant of bitcoin could pose substantial risks to the entire crypto market.

Lack of Investor Attraction and Value

Sun argues that cbBTC lacks the necessary mechanisms to attract new investors and questions its overall value: “cbBTC lacks proof of reserves and audits. If any issues arise with this product, users won’t be able to retrieve their funds. Additionally, any court order from US authorities could lead to the confiscation of all your bitcoins. This situation highlights how centralization can compromise bitcoin’s core principles. It’s a bleak day for the original cryptocurrency.”

Security and Market Oversight

Sun mentioned that representatives from decentralized finance projects have approached him, expressing their worries about potential increased market oversight and the security threats to the Etherium and Base networks. Previously, Justin Sun had announced that his team is developing a stablecoin that will eliminate gas fees for transfers on the Tron and Etherium networks. The developer assured that transaction fees would be covered entirely by the stablecoins themselves.

Conclusion

This contentious introduction of wrapped bitcoin by Coinbase continues to spark debate within the crypto community.