Coinbase has received fresh calls from Justin Sun to publish the PoR for its cbBTC as other exchanges are doing.
Tron Founder Justin Sun is unsatisfied with the wrapped Bitcoin (cbBTC) token launch by American cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN). This time, he requests that the exchange publish its Proof-of-Reserve (PoR) report, a document showing a platform’s financial health status.
Sun’s request comes after Coinbase CEO Brian Armstrong swiftly refuted rumors that the exchange had issued Bitcoin IOUs to spot Bitcoin ETF issuer BlackRock Inc (NYSE: BLK).
Justin Sun Says Auditing Is Not Enough
The crypto exchange is saying it is not feasible to implement a PoR. However, Justin Sun pointed to the growing adoption of PoR amongst top exchanges and questioned Coinbase’s failure to follow suit. Senior Bloomberg ETF Analyst Eric Balchunas believes that BlackRock’s involvement in the launch of cbBTC should add credibility to the offering.
He claims that reputable investment asset management firms will not condone any form of mismanagement when it comes to maintaining Bitcoin reserves. Still, Sun emphasized that all the crypto community requires is transparency, not necessarily perfection. In his opinion, Coinbase seems to be building a mountain out of a molehill, as revealing all wallet addresses is a relatively simple task.
While auditing accounts is important, Sun thinks that more than relying on auditing firms for security, it is needed to ensure funds remain on-chain. For emphasis, he highlighted the unfortunate implosion of Bahamian-headquartered crypto exchange FTX, which dealt the broader cryptocurrency industry a huge blow two years ago.
Citing the fall of Signature Bank, the Tron founder also explained that being a public company does not protect it from bankruptcy. Hence, he urged Coinbase to implement its PoR, which would help the exchange self-regulate. The availability of a PoR might also help the American crypto exchange gain the trust of its community members and other crypto enthusiasts.
cbBTC Hits $100M Market Cap in 24 Hours
The exchange launched the cbBTC product a few days ago. According to the exchange’s announcement, the cbBTC runs on the Ethereum (ETH) network and Layer-2 (L2) scaling solution Base as an ERC20 token. Notably, it is fully backed by Bitcoin at a ratio of 1:1.
“When Coinbase users send their BTC from Coinbase to an address on Base or Ethereum, that BTC will automatically be converted 1:1 to cbBTC. When users receive cbBTC in their Coinbase accounts, it will be converted 1:1 from cbBTC to BTC,” Coinbase explained.
Just immediately after its launch, Justin Sun outlined several glaring concerns about its centralization, risks of seizure by the government, and opaque nature. He did not fail to mention the perceived absence of transparency.
Despite these concerns, cbBTC attained a $100 million market cap in its first 24 hours, split between Base and Ethereum. Dune Analytics data showed that the circulating supply of cbBTC reached 1,720 tokens, with 43% on Coinbase’s layer-2 network and 57% on Ethereum.
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