Paul Grewal has addressed recent concerns regarding the terms of service for Coinbase\u2019s newly launched cbBTC, a wrapped Bitcoin product.<\/p>\n
The concerns arose after claims suggested that the exchange would not fully reimburse users for Bitcoin lost due to malicious activity or unforeseen events.<\/p>\n
The issue was first raised by an X user who highlighted what they believed to be a problematic part of the cbBTC user agreement. The individual argued that this provision would limit Coinbase\u2019s legal liability, claiming<\/a> that they would only reimburse clients with a \u201cproportional share of whatever BTC is left\u201d rather than the full amount in cases where Bitcoin was lost.<\/p>\n Journalist Alex O\u2019Donnell added context, explaining <\/a>that the crypto exchange would owe cbBTC holders for lost Bitcoin on a per-BTC basis but would not cover any additional losses. For example, if a user holding it as loan collateral experienced a liquidation due to lost Bitcoin, they would be reimbursed for the lost crypto but not for any related fees or losses from the liquidation.<\/p>\n Paul Grewal responded, confirming<\/a> that the liability is limited to the Bitcoin lost and does not extend to covering external losses from trades or leveraged positions.<\/p>\n \u201cIt\u2019s a limitation on liability that\u2019s pretty basic: we aren\u2019t liable for more than the BTC we lose. This language also makes clear the custodial relationship,\u201d he said.<\/p>\n Brian Armstrong also recently addressed<\/a> rising community skepticism over the product\u2019s transparency, confirming that cbBTC is backed by Coinbase itself.<\/p>\n On September 12, Coinbase launched<\/a> cbBTC, a tokenized or wrapped version of Bitcoin. The launch coincided with controversy surrounding BitGo\u2019s Wrapped Bitcoin (WBTC), which has gotten attention due to Tron founder Justin Sun\u2019s involvement.<\/p>\n Within a week of its launch, cbBTC became the third-largest wrapped Bitcoin product in a segment dominated by BitGo\u2019s WBTC.\u00a0A recent CryptoQuant report <\/a>showed that more than 153,000 WBTC tokens are in circulation, compared to cbBTC\u2019s 1,670.<\/p>\n However, despite its superiority, the wrapped BTC heavyweight has not been without debate. On August 9, BitGo announced a multi-jurisdictional agreement to split custody of the underlying Bitcoin for WBTC between Hong Kong, Singapore, and the United States.<\/p>\n It caused concerns in the crypto community, particularly with regard to Sun\u2019s potential influence over the project. In response, CEO Mike Belsche, was forced to reassure<\/a> users that the Tron founder would not have the ability to control or move funds in the new dispensation.<\/p>\n The post Coinbase Chief Legal Officer Clarifies cbBTC User Agreement Concerns<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Paul Grewal has addressed recent concerns regarding the terms of service for Coinbase\u2019s newly launched cbBTC, a wrapped Bitcoin product. The concerns arose after claims suggested that the exchange would not fully reimburse users for Bitcoin lost due to malicious activity or unforeseen events. Limited Liability Concerns The issue was first raised by an X […]<\/p>\n","protected":false},"author":0,"featured_media":8849,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-8848","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/8848"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8848"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/8848\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/8849"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}WBTC Controversy<\/h2>\n