Justin Sun, the founder of Tron and BitTorrent, has launched a scathing attack on Coinbase’s newly launched wrapped Bitcoin variant, cbBTC. Sun alleges that cbBTC lacks essential safeguards and poses significant risks to users.

In a series of tweets, Sun criticized cbBTC for its lack of proof-of-reserve, a mechanism that verifies that a cryptocurrency exchange holds sufficient reserves to back its issued tokens. He also questioned the absence of independent audits to ensure the security and transparency of the platform.

Sun’s most damning accusation was that Coinbase has the power to freeze anyone’s balance at any time. He argued that this centralized control undermines the core principles of Bitcoin, which is designed to be decentralized and resistant to censorship.

Sun compared cbBTC to a “trust me” system, claiming that users are essentially placing their trust in Coinbase to hold their Bitcoin safely. He warned that any U.S. government subpoena could potentially lead to the seizure of all Bitcoin held on the platform.

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Coinbase has not yet responded publicly to Sun’s accusations. However, the company has previously stated that cbBTC is backed by 1:1 reserves of Bitcoin and is designed to provide users with a more secure and convenient way to trade Bitcoin on the Coinbase platform.

The debate between Sun and Coinbase highlights the ongoing tension between centralized and decentralized cryptocurrencies. While centralized exchanges like Coinbase offer convenience and accessibility, they also raise concerns about security, privacy, and the potential for censorship. Decentralized platforms, on the other hand, prioritize autonomy and resistance to control but often come with higher technical barriers to entry.