Kraken announces its own Wrapped Bitcoin on Ethereum

Crypto exchange Kraken has joined the race for dominance in the Wrapped Bitcoins space and introduced its own Ethereum-based token, kBTC.

The Wrapped Bitcoins landscape is getting even more crowded as US-based crypto exchange Kraken introduced its own Wrapped Bitcoin just a month after rival Coinbase made the same move.

The “kBTC” token was created on the Ethereum network and is “fully backed 1:1 by an equivalent amount of Bitcoin” held at Kraken Financial, the San Francisco-based trading platform said in a blog announcement on Thursday, October 17. A depository institution authorized by Wyoming. Kraken underlined its commitment to transparency among competitors, emphasizing that “customers can verify this for themselves at any time by reviewing our reserves on-chain.”

Crypto exchanges compete in Wrapped Bitcoin war

The announcement noted that in addition to Ethereum, kBTC holders can also use the token in decentralized applications through interoperability with OP Mainnet (formerly known as Optimism).

Kraken noted that New York-based blockchain cybersecurity firm Trail of Bits evaluated the kBTC ERC-20 smart contract and that the audit included “a detailed review of our codebase and client architecture aimed at detecting and addressing any potential vulnerabilities.”

The launch comes just a month after Coinbase launched its own Wrapped Bitcoin called “cBTC,” which is available on both Ethereum and Base. Kraken’s move follows increased scrutiny of BitGo’s Wrapped Bitcoin (wBTC), especially after the firm partnered with Hong Kong’s BiT Global. This partnership has raised concerns in the crypto community about the possibility of transferring control over wBTC to an entity affiliated with TRON founder Justin Sun.