Cryptocurrency custody company BitGo has announced the transition of its Wrapped Bitcoin (WBTC) operations into a world-first multi-jurisdiction and multi-agency custody service through a unique partnership and joint venture with BiT Global If realized, BitGo will become a minority shareholder in this new joint venture.
According to BitGo, BiT Global is a global custody platform that is registered as a trust and company service provider (TCSP) in Hong Kong and has a legal operating structure. However, BitGo further pointed out that this cooperation also marks the deepening of the strategic cooperation between BitGo and Justin Justin Sun, the founder of the Tron ecosystem. Therefore, it can be speculated that Justin Sun may have significant influence or control in the joint venture that manages WBTC,
MakerDAO’s new proposal for risk control cuts WBTC as collateral
Faced with Sun's entry into WBTC, BA Labs Team quickly put forward a proposal for preventive measures against possible changes in WBTC on the MakerDAO forum, pointing out the risks that may arise from Justin Sun's participation in the management of WBTC joint ventures. BA Labs Team said in MakerDAO First proposed a proposal to stop using WBTC as collateral to create new loans.
Since TUSD passed into Justin Sun’s control, the stablecoin’s market operations and transparency have deteriorated, including the resignation of the former management team, the suspension of real-time proof of reserves, and multiple severe decouplings due to disruptions in redemption services.
In addition, other Justin Sun related projects have also shown signs of possible misappropriation, such as Huobi's USDT reserves being replaced by stUSDT, an RWA project controlled by Justin Sun that claims to hold U.S. Treasury debt reserves, but has yet to provide a clear audit or evidence to prove its existence. Overall, we believe that Justin Sun, as one of the controllers of the new WBTC joint venture, brings unacceptable risks.
Financial analysis expert Yu Zhe'an said that this incident has a significant impact on the DeFi market. He pointed out that based on Justin Sun's series of bad records in the past, the market is worried that if the control of WBTC is transferred to his hands, it may bring various unpredictable risks.
Currently, WBTC has a market value of approximately US$9.3 billion on Ethereum and is mainly used as collateral for lending platforms.
Brother Sun’s endorsement: Don’t worry! I don’t have the WBTC private key
Faced with market concerns that even WBTC may be controlled by Sun in the future, Justin Sunalso issued a post today (11th) to clarify that he does not have the authority to control any BTC reserves, and stated that WBTC is an important part of the DeFi ecosystem. Brother Sun is also looking forward to ensuring its continued development.
First of all, WBTC has not changed at all compared to before. The audit is conducted in real time and you can view it through http://wbtc.network . The minting process is entirely managed by the custodians of Bitglobal and Bitgo following the same procedures as before. Simply put, Bitglobal and Bitgo will not sign any unaudited transactions. Private keys are still protected using Bitgo's cold wallet technology and offline private keys, and are backed up in multiple countries and regions.
My personal involvement in WBTC is entirely strategic. I do not control the private keys to the WBTC reserve and cannot move any BTC reserves.
