Justin Sun Pushes for Coinbase to Adopt Proof-of-Reserve Following cbBTC Launch
In the wake of Coinbase’s launch of the wrapped Bitcoin token, cbBTC, Tron founder Justin Sun has raised transparency concerns, urging Coinbase to implement Proof-of-Reserve (PoR). While cbBTC achieved immediate success, Sun remains skeptical of the exchange’s long-term security practices, suggesting that Coinbase’s reluctance to adopt PoR is cause for alarm.
Sun’s Push for Proof-of-Reserve: What is Coinbase Covering?
Justin Sun’s call for Coinbase to adopt PoR stems from growing concerns surrounding the launch of cbBTC, a token that allows users to transfer Bitcoin holdings on a 1:1 ratio via Ethereum and Base. Sun criticized Coinbase for not adopting PoR, a system embraced by major exchanges like Binance to provide real-time asset transparency.
Despite Coinbase CEO Brian Armstrong’s defense, Sun remained firm in his belief that PoR is crucial for maintaining trust and ensuring transparency, especially after the high-profile collapse of FTX.
Impressive cbBTC Numbers Amid Sun’s Criticism
Despite Sun’s concerns, Coinbase’s cbBTC saw remarkable success, reaching a $100 million market cap within 24 hours of its release. The circulating supply hit 1,968 tokens, split between Base and Ethereum. Coinbase’s ERC20-based product offers a seamless conversion process between Bitcoin and cbBTC, yet Sun argues that the transparency surrounding its operation is insufficient.
Sun Warns of Broader Risks
Sun’s criticism extended beyond cbBTC, pointing to systemic issues in centralized exchanges. He stressed that transparency via PoR would be vital for Coinbase’s future, especially in maintaining user trust.
