BitGo CEO Mike Belshe has dismissed concerns over the involvement of Justin Sun in the company’s Wrapped Bitcoin (WBTC) business. The crypto custody platform recently announced a shift in its BTC holdings to jurisdictions like Singapore and Hong Kong, involving a partnership with Sun’s Tron ecosystem.
While the move aims to diversify custody, it has sparked controversy due to Sun’s past projects facing operational and transparency issues, according to risk management firm Block Analitica Labs (BA Labs). The firm has called for stricter measures on WBTC collateral.
Belshe, however, maintains that the underlying WBTC security protocols remain unchanged and that the controversy is a “reaction to the Justin Sun name than to facts.” He emphasized that BitGo retains control over transactions and that the primary risk lies in the distributed treasury management.
Sun echoed Belshe’s stance, asserting that his role is strategic and does not involve direct access to WBTC funds. The keys remain under BitGo’s custody, he claimed.
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The MakerDAO community is set to vote on Aug. 12 on whether to implement changes to its WBTC holdings based on BA Labs’ recommendations. The outcome of this vote will significantly impact the WBTC ecosystem and investor confidence.
The controversy surrounding WBTC comes at a critical time for the cryptocurrency industry, which is already grappling with regulatory uncertainty and market volatility. The outcome of the MakerDAO vote could set a precedent for how other decentralized finance (DeFi) protocols assess the risk associated with assets backed by centralized entities. If the community decides to reduce its exposure to WBTC, it could have far-reaching implications for the broader DeFi ecosystem and the future of wrapped tokens.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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