WBTC will be placed under the management of a new entity called Bit Global, a company with ties to crypto “tycoon” Justin Sun.
Justin Sun's Company Becomes New Custodian of WBTC - Crypto Community “Concerned”
On August 9, cryptocurrency custody company BitGo announced that it will transfer custody operations of Wrapped Bitcoin (WBTC) to Bit Global, a new entity linked to Justin Sun.
WBTC is a Tokenize version of Bitcoin on Ethereum , essentially turning BTC into an ERC-20 Token that can be traded and used in DeFi activities on the world's largest smart contract blockchain. Since its launch in January 2019, it has been hailed as a way to link the two leading cryptocurrency networks, BTC and ETH, bringing additional uses to Bitcoin.
As of the time of writing, there are nearly 155,000 WBTC in circulation on Ethereum, worth up to $9.3 billion. All of these assets are custodians of BitGo, a reputable crypto asset management company in the crypto industry.
WBTC TVL Fluctuation. Source: defillama (August 10, 2024)
WBTC is currently one of the top collateral assets in major DeFi protocols on Ethereum, with top holding addresses being big names such as AAVE , Compound , Spark Protocol , Maker , Wormhole bridge and bridges to Arbitrum , Polygon , Optimism , ...
List of wallet addresses holding the most WBTC. Source: Etherscan (August 10, 2024)
However, BitGo recently announced that it will hand over WBTC management to another entity called Bit Global. This is a Hong Kong-registered company founded by Justin Sun, the TRON ecosystem, and BitGo, with BitGo only holding a minority ownership.
BitGo stated that Bit Global will still use the most secure methods of storing Bitcoin, including Cold Storage and multi-authentication technology. The difference is that Bit Global will now distribute private keys to different geographical locations, adding a new layer of security. BitGo and Bit Global will also maintain transparency for WBTC and regularly update proof of asset storage.
BitGo is pleased to announce the move of its WBTC business to the world's first multi-jurisdictional and multi-institutional custody via a unique partnership and joint-venture with Bit Global.
— BitGo (@BitGo) August 9, 2024
This upgrade will occur 60 days from today with no disruption or interruptions to… pic.twitter.com/yNUoyTwsqL
The transfer of WBTC management rights from BitGo to Bit Global will be 60 days from the date of announcement, i.e. October 8, 2024.
However, there are mixed opinions in the crypto community about the change of custody unit for WBTC. However, most of the concerns stem from the new relationship with Bit Global and Justin Sun - a notorious figure in the cryptocurrency industry.
Some believe that this is an opportunity for a competitor to WBTC to emerge and gain market share as WBTC users “escape” from the old protocol to avoid dependence on Justin Sun. Others call for DeFi projects on Ethereum that are accepting WBTC as collateral to closely monitor this incident to avoid unwanted risks.
Wow, I honestly think no better time for a WBTC competitor to come in quickly. https://t.co/IeXWxHcf1X
— Arthur (@Arthur_0x) August 10, 2024
Every DeFi protocol DAO should research the new wBTC set up.
— Ignas | DeFi (@DefiIgnas) August 10, 2024
BitGo is moving its WBTC business to multi-jurisdictional custody by partnering with Bit Global, based in HK.
"This is a strategic partnership between BitGo, Justin Sun, and the TRON ecosystem." https://t.co/5xOXyYL9IE pic.twitter.com/rITqyxJqWX
Besides the TRON ecosystem and projects within it such as stablecoin USDD, BitTorrent (BTT), Justin Sun also directly and indirectly owns many other brands in the crypto stablecoin industry TUSD, Poloniex and HTX (formerly Huobi).
Shortly after Justin Sun took over and renamed Huobi to HTX in September 2023, the platform suffered two consecutive attacks with losses of up to $100 million , despite not recording any security incidents in the previous 10 years of operation. A month later, Poloniex was hacked, losing another $125 million in assets.
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