World Liberty Financial, backed by the family of US President-elect Donald Trump, on Wednesday exchanged around $10 million worth of Coinbase’s wrapped bitcoin (COIN), cbBTC, for rival WBTC.
Wrapped Bitcoin is a form of the world’s largest cryptocurrency that can be used in decentralized finance (DeFi) on blockchains other than Bitcoin.
Coinbase introduced cbBTC in September and in November said it would delist WBTC, citing its listing standards. That action led BiT Global, a custodian involved in WBTC, to sue the crypto exchange to prevent delisting. A court ruled against BiT Global on Wednesday.
There is one more link in the chain: Justin Sun, the founder of the Tron blockchain and one of CoinDesk’s most influential in 2024. In its defense, Coinbase cited BiT Global’s ties to Sun, who has been accused of fraud and market manipulation in the US as an “unacceptable risk”. Sun, who denies the allegations, also became an advisor to World Liberty Financial, a position he obtained after acquiring a $30 million stake in the platform last month in exchange for WLFI tokens.
World Liberty Finance has not explicitly stated its decision to exchange the tokens. On-chain data shows that he has been active in the market this past week, acquiring millions of dollars worth of Aave (AAVE), Chainlink’s LINK, and Ethena’s ENA tokens, all companies related to him through partnerships or integrations.
Sun has little to do directly with WBTC. In August, BitGo, the original and long-time custodian of the bitcoin that backs WBTC, said it would distribute control over the project’s custody to three entities globally (including BiT Global) instead of just one to help decentralize the operation.
BiT Global is registered as a Trust and Business Services Provider (TCSP) in Hong Kong and is a “strategic partnership between BitGo, Justin Sun and the Tron ecosystem,” according to the August statement.
Sun has no direct or indirect stake in the capitalization table of those companies or BiT Global’s listed shareholders, board member Robert Liu said in an interview in October.
Some board members believe Sun’s involvement is actually “good for WBTC,” he said, given the success of Tron, crypto exchange HTX and other companies.
“The Tron blockchain has more than 50% of the global market share,” Liu said. “They have the highest turnover rate. Therefore, people have no problem putting more than $60 billion of stablecoin assets in circulation on the Tron blockchain.”
