BitGo to Introduce New WBTC Custody Model with Multi-Jurisdictional Approach
BitGo, a leading cryptocurrency custody platform, is set to implement a new multi-jurisdictional and multi-institution custody model for Wrapped Bitcoin (WBTC). The recent decision has sparked concerns within the cryptocurrency community, particularly due to the involvement of Tron blockchain founder Justin Sun.
Sun’s Role in WBTC Custody Raises Concerns
Following the announcement of BitGo’s plan on August 9, concerns have been raised regarding the expansion of storage locations to Hong Kong and Singapore. The popular decentralized finance platform MakerDAO has initiated an evaluation of the potential risks associated with BitGo’s new WBTC custody strategy.
There is a proposed measure within the MakerDAO community to reduce all active WBTC debt on the network to zero. The primary concern revolves around Sun potentially gaining significant leverage over WBTC due to his involvement in the initiative.
Community Concerns and Response from BitGo
Members of the cryptocurrency community have expressed worries about Justin Sun possibly misusing his influence to manipulate proof-of-hold data or issue an excessive amount of WBTC. Bitcoin Magazine writer Alex Bergeron has even referred to the partnership between BitGo and Justin Sun as an unprecedented business decision.
However, BitGo CEO Mike Belsey has sought to allay these concerns by emphasizing the platform’s robust security measures. He assured that any form of tampering is prevented by the security architecture in place. Additionally, Belsey clarified that BitGo will not authorize any mining activity without a corresponding BTC deposit.
Sun’s Clarification and Reassurance
In response to the concerns raised, Justin Sun has stated that his role in the project is solely strategic. He has affirmed that he does not have control over the private keys to WBTC reserves and cannot access BTC reserves as rumored. Sun has reiterated that his participation aims to strengthen the decentralization, security protocols, and overall security within the digital assets ecosystem.
He further emphasized the commitment of BitGo and BitGlobal to not sign unaudited transactions, ensuring the security and protection of funds through cold wallet technology and offline keys.
As the community continues to scrutinize the new WBTC custody model, both BitGo and Justin Sun are actively engaging with stakeholders to address any concerns and clarify their roles in the initiative.
