Wrapped Bitcoin (WBTC)

Wrapped Bitcoin (WBTC), a token backed one-to-one by Bitcoin on the Ethereum blockchain, is set for new ownership, as announced by longtime custodian BitGo.

BitGo will become a minority owner in a joint venture with Hong Kong’s BiT Global, providing multi-jurisdictional custody for the WBTC business. This partnership involves Justin Sun, founder of Tron, whose reputation in the crypto industry has been controversial.

Due to Sun’s involvement, Maker DAO’s risk management team has proposed halting new borrowing against WBTC collateral, expressing concerns about the level of risk associated with Sun’s controlling interest.

BitGo CEO Mike Belshe reassured stakeholders about security, stressing that BiT Global manages customer accounts under strict legal oversight and that WBTC’s attestations will continue through wbtc.network.

In response, Justin Sun emphasized that his role is strategic, denying control over private keys to the WBTC reserves.

Belshe also compared WBTC’s governance to decentralized alternatives in DeFi, stating that the latter carries inherent risks that make WBTC more secure and operationally expensive. Developer GFX Labs raised concerns about the scrutiny faced by WBTC compared to other centralized assets.

Belshe defended BitGo’s reputation for security and offered to assist Maker DAO in addressing any concerns, suggesting that the situation may not be as concerning as perceived.