BitGo CEO, Mike Belshe, has reaffirmed the independence of Wrapped Bitcoin (wBTC) from Justin Sun, stating that neither Sun nor BiT Global have access to the keys of the assets held by BitGo.
In response to concerns about Sun’s potential influence, MakerDAO has decided to stop using wBTC vaults as a source of liquidity, a measure that will be implemented after August 15.
Despite the concerns, wBTC burn volumes have remained stable, but Coinbase could provide an alternative with its own Wrapped Bitcoin, called cbBTC.
The CEO of BitGo, Mike Belshe, has recently reiterated the independence of Wrapped Bitcoin (wBTC) from Justin Sun, the founder of Tron, amidst growing concerns about Sun’s potential influence on the underlying assets of wBTC.
These concerns have been exacerbated by a proposal to transfer custody of wBTC to an entity called BiT Global, partially controlled by Sun, which has sparked debates within the crypto community.
Concerns and BitGo’s Reassurance
Justin Sun will be a part of a new joint venture with BiT Global (a Bithumb company) and BitGo to operate Wrapped Bitcoin products (WBTC). However, a thorough examination of BiT Global’s corporate documents reveals alarming connections with Sun’s empire.
BiT Global Trust Limited is a Hong Kong-based company that lists two directors: Zhihong Liu and Yiying Jiang.
Yiying Jiang has been involved with other companies related to Justin Sun. She was previously a director of DTV Limited, a company linked to BitTorrent and owned by Sun. Furthermore, Jiang was also a director of Augustech LLC, a company created to provide services to Poloniex, which Sun owns.
Jiang has also been cited as the owner of Huobi Technology Europe Ltd before its dissolution. Sun claimed to be just an advisor of HTX (formerly Huobi). Jiang was also a director of The TRON Network Limited and is responsible for signing TrueUSD attestation reports as an executive of Techteryx.
During an online discussion on X, Belshe made it clear that neither Justin Sun nor BiT Global have access to the keys of the assets held by crypto custodian BitGo. He explained that the security keys are distributed among BitGo entities in the United States, Singapore, and BiT Global, preventing any single actor from taking control of the underlying treasury or making unauthorized wBTC issuances.
Belshe also emphasized that Justin Sun is not employed by BiT Global, which is structured as a public holding company in Hong Kong with a fiduciary obligation to protect client assets. Under local laws, no individual can own more than 20% of the company, further limiting Sun’s potential influence.
MakerDAO’s Reaction
In response to the concerns raised by this proposal, MakerDAO, the issuer of the stablecoin DAI, has decided to reduce its exposure to wBTC. A motion has been passed to stop using wBTC vaults as a source of liquidity.
While this decision prevents new borrowings from these vaults, existing positions will not be liquidated. This MakerDAO decision, which will be implemented after August 15, reflects increased caution towards the potential risks associated with key custody centralization.
Despite these concerns, on-chain data indicates that wBTC exchange and burn volumes, i.e., the conversion of wBTC to Bitcoin, have remained stable. There have been no notable changes in volumes, suggesting that users have not yet massively turned away from wBTC. However, Coinbase has signaled that it may launch its own version of Wrapped Bitcoin, called cbBTC, which could offer an alternative to users looking to diversify their options.
