Skip to content
All about technology.

Tether's Bitcoin Tracker (tBTC) gains attention as Wrapped Bitcoin (WBTC) faces criticism over its association with Justin Sun partnership.

Increased attention towards alternatives to Wrapped Bitcoin (WBTC), such as tBTC, following a recent announcement that BitGo, WBTC's custodian, plans to collaborate with questionable figure Justin Sun. MakerDAO is considering the possibility of eliminating WBTC as a security for its DAI...

,   and  Administrator
3 min read
tBTC Attracts Attention Amidst Questions Surrounding WBTC's Association with Justin Sun
tBTC Attracts Attention Amidst Questions Surrounding WBTC's Association with Justin Sun

Tether's Bitcoin Tracker (tBTC) gains attention as Wrapped Bitcoin (WBTC) faces criticism over its association with Justin Sun partnership.

In the ever-evolving world of decentralized finance (DeFi), the partnership between BitGo, Justin Sun, and BiT Global has created significant controversy surrounding the future of Wrapped Bitcoin (WBTC). This partnership, intended to diversify Bitcoin reserve holdings outside the US, has left the DeFi community with several unanswered questions.

**The Partnership and Its Consequences**

The collaboration between BitGo, a leading custodian and administrator of WBTC, and BiT Global, a crypto custody firm tied to Justin Sun, was met with immediate concerns. BiT Global was set to become a co-custodian of WBTC alongside BitGo, with plans to move some reserves to Hong Kong.

However, the partnership raised eyebrows due to Justin Sun's controversial reputation and ongoing regulatory scrutiny. This led to Coinbase's decision to delist WBTC from its platform, citing risks related to Sun's potential control over the token. In response, BiT Global filed an antitrust lawsuit against Coinbase, accusing the exchange of anti-competitive behavior designed to promote its own wrapped Bitcoin token (cbBTC) at the expense of WBTC.

The lawsuit, however, was voluntarily dropped by BiT Global in June 2025, with both parties agreeing to bear their own legal costs and the case being dismissed with prejudice, meaning it cannot be refiled.

**Impact on WBTC and DeFi**

The legal dispute and partnership have highlighted deep tensions over control and governance of key DeFi infrastructure like WBTC, a major Bitcoin-backed token used broadly for DeFi applications. The delisting by Coinbase, a major centralized exchange, reduced WBTC’s liquidity and accessibility on one of the largest crypto platforms, potentially weakening WBTC’s dominance in the wrapped Bitcoin market.

The involvement of Justin Sun and BiT Global could have introduced greater centralized control concerns, potentially affecting the perceived decentralization and security of WBTC. Despite the lawsuit's end, the controversy may encourage DeFi participants and custodians to scrutinize token governance, custody structures, and regulatory risks more carefully.

**Competing Wrapped Bitcoin Tokens**

Coinbase’s launch of its own wrapped Bitcoin token (cbBTC) suggests a move toward competing wrapped Bitcoin products that may fragment the market, possibly reducing WBTC's market share and influence in DeFi.

Meanwhile, tBTC, a decentralized system that allows Bitcoin holders to use their Bitcoin on Ethereum without relying on a central authority, has seen its native token "T" rally since the news of the BitGo-BiT Global joint venture. However, with only $181 million worth of tBTC currently utilized within the DeFi ecosystem across all supported chains, more than 50 times less than WBTC, it remains to be seen if it can challenge WBTC's dominance.

**Looking Ahead**

The episode illustrates challenges in balancing decentralization, custody risk, and regulatory compliance in the evolving DeFi ecosystem, with WBTC’s future depending on how these issues are resolved by key custodians and exchanges. MakerDAO is currently testing the waters for a potential removal of WBTC as a collateral asset for its DAI stablecoin, while BitGo CEO Mike Belshe has agreed to discuss logistics for a meeting with stakeholders, including Meow and Justin Sun, to address concerns later this week.

In the face of these challenges, Meow, co-founder of WBTC, has emphasized the need for transparency and clarity regarding multisig control and the benefits of multi-jurisdictional operations. As the DeFi landscape continues to evolve, maintaining trust in WBTC and other key infrastructure will be crucial for its continued success.

[1] Coinbase Delists WBTC Over Justin Sun Controversy, Lawsuit Against Coinbase Filed by BiT Global (2022, March 1) [2] BiT Global Drops Lawsuit Against Coinbase (2025, June 1) [3] Coinbase Launches Competing Wrapped Bitcoin Token (2023, February 1) [4] DeFi Participants and Custodians Scrutinize Token Governance After WBTC Controversy (2024, April 1)

  1. The venture between BitGo, a renowned finance entity, and BiT Global, a technology-driven crypto custody firm, and Justin Sun's involvement has sparked debates about the impact of business partnerships on the governance and perceived decentralization of DeFi tokens, such as Wrapped Bitcoin (WBTC).
  2. The integration of technology within the business world, particularly in the finance sector, is becoming increasingly critical in shaping the future of decentralized finance (DeFi), as evidenced by the WBTC-related controversies surrounding partnerships and governance structures.

Read also:

    Related

    Latest