**Coinbase Addresses cbBTC Controversy**

Coinbase's chief legal officer, Paul Grewal, has responded to concerns about the user terms for their new cbBTC "wrapped Bitcoin" product. Grewal confirmed that Coinbase will fully reimburse clients if the exchange loses the underlying Bitcoin (BTC).

This clarification came after worries emerged about a provision in the cbBTC user agreement. Some believed it implied Coinbase wouldn't fully reimburse customers in case of malicious activity or unforeseen events, offering only a "proportional share of whatever BTC is left."

Grewal explained that while Coinbase covers losses from malicious activities, it doesn't cover fees or losses from complex trades or leveraged positions. For instance, if cbBTC is used as loan collateral and the underlying Bitcoin is lost, Coinbase will reimburse the Bitcoin but not any fees or losses from loan liquidation.

Coinbase launched cbBTC on Sept. 12 in the UK, Australia, Singapore, and most US states. The launch comes amid controversy surrounding BitGo's Wrapped Bitcoin (WBTC) and concerns about Justin Sun's involvement. Despite the controversy, Coinbase's cbBTC has quickly become the third-largest wrapped BTC token.