Coinbase General Counsel Responds to Concerns Over cbBTC Terms of Service
Date: 2024-09-23 Author: Henry Casey Categories: CRYPTO PAYMENTS
Coinbase General Counsel Paul Grewal has responded to recent concerns and doubts (FUD) over the terms of service of its new cbBTC “wrapped Bitcoin” product by confirming that Coinbase will fully refund customers if they lose their underlying Bitcoin.
The announcement comes after one user highlighted a supposed problematic clause in the cbBTC terms of service, claiming that Coinbase will not refund customers the full amount of Bitcoin lost due to malicious acts or unforeseen circumstances, but will instead provide a “pro-rata share of the remaining BTC.”
In a statement to Cointelegraph, the general counsel confirmed that the company’s policy limits Coinbase’s liability for external losses arising from complex trades and leveraged positions that customers may take.
For example, traders using cbBTC as collateral on lending platforms who face liquidation after losing their underlying Bitcoin due to malicious activity will be fully reimbursed by Coinbase for the lost Bitcoin, but will not receive back any fees or losses that arose from the loan liquidation.
Coinbase Launches cbBTC Amid Controversy
On September 12, Coinbase launched cbBTC, a tokenized version of Bitcoin, to residents of the UK, Australia, Singapore, and every US state except New York.
The announcement comes amid controversy surrounding BitGo’s Wrapped Bitcoin (WBTC) product and Tron founder Justin Sun’s involvement in the project.
On August 9, BitGo announced that it had entered into a multi-party agreement that would split the storage locations of the underlying Bitcoin between Hong Kong, Singapore, and the United States.
Amid concerns about Sun’s involvement in the project, BitGo CEO Mike Belshe assured the crypto community that Sun would not be able to move funds.
Since then, the Sky (formerly known as Maker) community has voted to delist WBTC from the platform, and Coinbase’s cbBTC has become the third-largest wrapped BTC token in a week.
