BitGo CEO Tries to Reassure Community About Justin Sun's Ties to wBTC
- BitGo CEO Mike Belshe has reaffirmed the independence of Wrapped Bitcoin (wBTC) from Justin Sun, ensuring that neither Sun nor BiT Global have access to the keys to assets held by BitGo.
- Faced with concerns about Sun's potential influence, MakerDAO has decided to stop using wBTC vaults as a source of liquidity, a move that will be enforceable after August 15.
- Despite concerns, wBTC burn volumes have remained steady, but Coinbase could offer an alternative with its own Wrapped Bitcoin, called cbBTC.
THE CEO of BitGo, Mike Belsherecently reiterated Wrapped Bitcoin (wBTC) independence vis-à-vis Justin Sunthe founder of Tronamid growing concerns about Sun's potential influence over the assets underlying wBTC.
These concerns have been exacerbated by a proposal to transfer custody of wBTC to an entity called BiT Globalpartially controlled by Sun, which has sparked debate within the crypto community.
BitGo's Concerns and Reassurance
Justin Sun will therefore be part of a new joint venture with BiT Global (a company of Bithumb) And BitGo For exploit Wrapped Bitcoin products (WBTC). However, a closer look at BiT Global's corporate documents reveals disturbing links to the Sun empire.
BiT Global Trust Limited is a Hong Kong-based company, listing two directors: Zhihong Liu and Yiying Jiang.
Yiying Jiang has already been involved in other businesses related to Justin Sun. She was notably director of DTV Limiteda company linked to BitTorrent and owned by Sun. In addition, Jiang was also director from Augustech LLCa company established to provide services to Poloniexwhich belongs to Sun.
Jiang has also been cited as the owner of Huobi Technology Europe Ltd. before its dissolution. Sun claimed that he was only an advisor to HTX (formerly Huobi). Jiang was also director of The TRON Network Limited and is responsible for signing the attestation reports of TrueUSDin his capacity as executive of Techteryx.
During an online discussion on X, Belshe wanted to clarify the situation by stating that neither Justin Sun nor BiT Global have access to the keys to the assets held by the crypto custodian BitGo. He explained that the security keys are distributed among BitGo entities in the United States, Singapore, as well as BiT Global, thus preventing any single actor from taking control of the underlying treasury or to make unauthorized issuances of wBTC.
Belshe also stressed that Justin Sun is not employed by BiT Globalwhich is structured as a public holding company in Hong Kong, with a fiduciary duty to protect clients' assets. Under local law, no individual can own more than 20% of the company, further limiting Sun's potential influence.
MakerDAO Reaction
In view of the concerns raised by this proposal, MakerDAOthe issuer of the stablecoin DAIdecided to reduce your exposure to wBTC. A motion was adopted to stop using wBTC vaults as a source of liquidity.
Although this decision prevents further borrowing from these vaults, existing positions will not be liquidated. This decision by MakerDAOwhich will be enforceable after August 15, reflects increased caution about the potential risks associated with the centralization of custody keys.
Despite these concerns, on-chain data indicates that trading volume and wBTC burnthat is to say the wBTC to bitcoin conversionremained stable. There were no notable changes in volumes, suggesting that the users have not yet massively turned away from wBTC. However, the platform Coinbase reported that it might launch its own version of Wrapped Bitcoincalled cbBTCwhich could offer an alternative to users looking to diversify their options.
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