In a decisive move, World Liberty Financial, a platform with close ties to the Trump family, has swapped its entire holding of $10 million worth of Coinbase-wrapped bitcoin (cbBTC) for the rival token Wrapped Bitcoin (WBTC). The swap took place on Wednesday, the very same day that BiT Global, a WBTC custodian, lost a court case seeking to prevent Coinbase from delisting WBTC.
Spotlight on Sun’s Advisory Role
The plot thickens with the revelation that Justin Sun, the prominent founder of the Tron blockchain, recently became an adviser to World Liberty Financial. Sun, one of CoinDesk’s Most Influential figures of 2024, acquired a substantial $30 million stake in the platform last month in exchange for WLFI tokens. Despite accusations of fraud and market manipulation in the U.S., which Sun vehemently denies, he has managed to secure this influential position.
Coinbase’s Delisting Dilemma
The controversy surrounding WBTC began in November when Coinbase announced its intention to delist the token, citing its listing standards. In its defense, the crypto exchange pointed to BiT Global’s links to Sun, deeming it an “unacceptable risk.” This decision prompted BiT Global to take legal action to prevent the removal, but the court ultimately ruled against them on Wednesday.
Coinbase introduced cbBTC in September, and in November said it would delist WBTC, citing its listing standards.
World Liberty’s Crypto Moves
While World Liberty Financial has not explicitly stated its reasons for the token swap, on-chain data reveals the platform’s recent market activity. Over the past week, it has acquired millions of dollars worth of tokens from companies it has partnerships or integrations with, including Aave (AAVE), Chainlink’s LINK, and Ethena’s ENA.
The Sun Connection
Despite the controversy surrounding Sun, some BiT Global board members believe his involvement is actually beneficial for WBTC. They cite the success of his various ventures, including the Tron blockchain and crypto exchange HTX.
The Tron blockchain has more than 50% of global market share. They have the highest turnover rate. So people have no issue putting more than $60 billion of the stablecoin assets circulating on Tron blockchain.
– Robert Liu, BiT Global board member
The Future of Wrapped Tokens
This high-stakes token swap raises questions about the stability and interchangeability of wrapped cryptocurrencies. As major players like World Liberty Financial vote with their assets, moving from cbBTC to WBTC, it could signal shifting tides in the wrapped token market. The outcome of the legal battle between Coinbase and BiT Global may also set important precedents for the future of these digital assets.
As the crypto world watches this drama unfold, one thing is clear: the actions of key stakeholders like World Liberty Financial, Coinbase, and influential figures like Justin Sun can have ripple effects throughout the industry. The delisting dispute and subsequent token swap may be just the beginning of a larger reckoning for wrapped cryptocurrencies.
