Coinbase's wrapped Bitcoin product cbBTC continues to face significant challenges over its transparency.
Lazarus Group often uses Tornado Cash to obscure its transactions as part of a sophisticated laundering process, which sometimes involves chain-hopping.
21.co, the parent company of asset management firm 21Shares, has integrated Chainlink Proof of Reserve on the Ethereum and Solana mainnet to bolster transparency of its wrapped Bitcoin product, 21BTC, according to a Sept. 23 statement.
The company will use Chainlink’s Proof of Reserve through its digital asset platform, Onyx, to automate real-time reserve verification to ensure secure minting of 21BTC.
The firm said the integration will directly result in decentralized oversight and transparency, which will benefit users and increase confidence in the token. Users will be able to independently verify asset collateralization in real time.
21BTC was first launched on Solana in May and later on Ethereum in September. It is a fully backed token with 1:1 Bitcoin reserves held in cold storage.
Johann Eid, Chief Business Officer at Chainlink Labs, said:
“Proof of Reserve’s role in enabling a secure minting function is a key step to creating a reliable framework that allows for the tokenization of trillions of dollars in value.”
Coinbase rival’s challenges
While 21.co has focused on improving transparency for 21BTC, Coinbase’s wrapped Bitcoin (cbBTC) continues to face scrutiny.
On Sept. 23, 0xngmi, the founder of DeFillama, criticized Coinbase’s cbBTC’s lack of transparency. He said:
“Almost every single bridge (including WBTC) provides a Proof of Reserves so you can check that the issued coins are backed. But Coinbase doesn’t, cbBTC is way below the standard in terms of transparency.”
This comes as Coinbase’s Chief Legal Officer, Paul Grewal, also had to address concerns about cbBTC’s terms of service. Some X users had raised alarms that the exchange may not fully reimburse lost Bitcoin in cases of malicious activity or unforeseen events.
However, Grewal clarified that Coinbase’s liability only covers the Bitcoin lost. It does not extend to losses from trades or leveraged positions. He stated:
“It’s a limitation on liability that’s pretty basic: we aren’t liable for more than the BTC we lose. This language also makes clear the custodial relationship.”
Despite these concerns, cbBTC has gained traction, with nearly 3,000 tokens circulating within two weeks of its launch. It has quickly become the third-largest wrapped Bitcoin token, with a market capitalization of around $170 million and a trading volume that has surpassed $1 billion in the last 24 hours, according to Dune Analytics data.
Binance clarifies it never owned WazirX, demands accountability
Binance has distanced itself from the ongoing struggles of the Indian crypto exchange WazirX in a Sept. 17 statement.
According to Binance, WazirX co-founder Nischal Shetty made several misleading statements that suggested the exchange might be responsible for the losses suffered by Indian crypto trading platform users after a $235 million hack in July.
Binance called the accusations “outrageously misleading,” clarifying that it has never “owned, controlled, or operated WazirX at any time, including before, during, or after the alleged hack.”
Binance also stated:
“Their attempts to shift responsibility is a disappointing deflection tactic, but it should not distract anyone from the glaring issue to be addressed here: the need for the WazirX team to be held accountable for user funds lost under their management.”
Clearing the air
In the extensive post, Binance reiterated that it does not own WazirX despite earlier negotiations to acquire the Indian exchange.
According to the exchange:
“Binance never acquired or controlled WazirX. While a contract had been signed between the parties, the proposed transaction never closed due to Zettai’s failure to perform its obligations.”
Instead, WazirX is currently owned by Zanmai Labs Pvt Ltd, an India-based firm registered with local regulators. Zanmai is a subsidiary of Zettai, a Singapore-based company owned by Shetty.
Due to this, Binance rejected Shetty’s suggestion that Zettai’s creditors could seek compensation from the Richard Teng-led platform.
Binance stated:
“There is no legal basis, in any scenario, to the claim that Binance would be liable for claims against Zettai. Any suggestion of Mr. Shetty to this effect is incorrect.”
Furthermore, Binance acknowledged that it previously provided tech solutions and support for the embattled Indian exchange.
However, Binance denied any responsibility for the hack, clarifying that Shetty and Zettai chose Liminal as a custody provider without its involvement after WazirX’s funds were removed from its platform.
In addition, Binance also stated it was never part of WazirX’s user agreement. Despite demanding that any references to its name be removed from the agreement, Binance claimed Shetty and Zanmai have repeatedly ignored these requests.
Unresponsive WazirX
Despite distancing itself from the Indian exchange, Binance revealed that its attempt to help the WazirX team has been rebuffed.
According to the exchange, it has been unable to verify the hack independently because its request for reports about the attack has not been answered. It stated:
“We have requested the WazirX team to provide us with their reports on the incident including all internal reports as well as the purported report from Mandiant from Aug. 14, 2024, which details the cause of the attack, and verification of the amount and proportion of user funds affected, but these requests remained unanswered.”
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