Maker

Wrapped Bitcoin

DeFi

Bitcoin

<a href="https://bitcoinworld.co.in/justin-suns-strategic-involvement-in-wrapped-bitcoin-wbtc-raises-concerns/" title="Justin Sun’s Strategic Involvement In Wrapped Bitcoin (WBTC) Raises Concerns" rel="nofollow"></a>
Tron’s founder Justin Sun has hit headlines following his involvement with Wrapped Bitcoin (WBTC) custody operations. His firm, BiT Global, has <a href="https://x.com/BitGo/status/1821927623494439130">partnered</a> with BitGo, to drive “first multi-jurisdictional and multi-institutional custody.” 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
 BitGo is pleased to announce the move of its WBTC business to the world’s first multi-jurisdictional and multi-institutional custody via a unique partnership and joint-venture with BiT Global. 
 This upgrade will occur 60 days from today with no disruption or interruptions to… <a href="https://t.co/yNUoyTwsqL">pic.twitter.com/yNUoyTwsqL</a> 
 — BitGo (@BitGo) <a href="https://twitter.com/BitGo/status/1821927623494439130?ref_src=twsrc%5Etfw">August 9, 2024</a>
</blockquote> 
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
However, the partnership has raised decentralization concerns among community members, prompting the executive to respond and defend himself.&nbsp; 
Part of Sun’s statement read,&nbsp; 
“My personal involvement in WBTC is entirely strategic. I do not control the private keys to the WBTC reserves and cannot move any BTC reserves.” 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
 Recently, I've heard that the community has some concerns about my involvement in various projects, including WBTC. I would like to clarify the following points: 
 There have been no changes to WBTC compared to before. The audits are conducted in real-time and can be accessed via… 
 — H.E. Justin Sun 孙宇晨 (@justinsuntron) <a href="https://twitter.com/justinsuntron/status/1822370692014485937?ref_src=twsrc%5Etfw">August 10, 2024</a>
</blockquote> 
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
Sun added that,&nbsp; 
“But my goal with all these relationships is to promote projects dedicated to decentralization, security protocols, and safety. WBTC is a critical part of the DeFi ecosystem, and I look forward to ensuring it continues to be!”&nbsp; 
<h3 id="span-style-font-weight-400-reaction-to-justin-sun-s-wbtc-move-span">Reaction To Justin Sun’s WBTC Move</h3> 
For perspective, WBTC is one of the largest DeFi collateral tokens. It’s backed 1:1 with Bitcoin to bring BTC’s liquidity within Ethereum’s DeFi ecosystem.&nbsp; 
Following the Sun’s partnership with WBTC, a key DeFi player Maker flagged <a href="https://forum.makerdao.com/t/wbtc-changes-and-risk-mitigation-10-august-2024/24844">the</a> move as a risk.&nbsp; 
“We find that Sun’s involvement as a controlling interest in the new WBTC joint venture presents an unacceptable level of risk.” 
Maker cited a lack of transparency in other Sun’s projects, including Huobi’s USDT reserves. Additionally, the firm labeled BitGo a counter-party risk after Galaxy Digital’s recent failed acquisition.&nbsp; 
As a result, Maker was mulling delisting WBTC from its platforms unless BitGo assured that the new partnership would be safe.&nbsp; 
“We will consider further recommendations for parameter changes to protect the protocol and mitigate counterparty risks, up to and including potential full offboarding of all Maker and Spark WBTC collateral integrations.” 
However, in a rejoinder, BitGo CEO Mike Belshe dismissed Maker’s concerns, stating that they are “reaction to Justin Sun and not facts.” 
“This seems to be more a reaction to the Justin Sun name than to facts.” 
On his part, Wormhole co-founder Dan Reecer nudged players to opt for decentralized wrapped BTC with decentralized custodians.&nbsp; 
“Another example of decentralization not being a priority until there’s a wakeup call.” 
The decentralized wrapped BTC calls were also echoed by Austin Federa, Strategy executive at Solana Foundation.&nbsp; 
“Decentralized wrapped bitcoin is badly needed. It’s wild we’re 15 years into the Bitcoin revolution and still have to trust centralized custodians.” 
At the time of writing, WBTC had $9.4 billion in TVL (total value locked). A few hours after concerns were raised about Sun’s involvement, there was no sign of a steep decline in TVL or outflows.

Justin Sun’s Strategic Involvement In Wrapped Bitcoin (WBTC) Raises Concerns

Table of Contents

ItsBitcoinWorld

Other articles published on Aug 12, 2024

India poised to become web3 powerhouse: expert

Binance Delists 15 Coins, Bitcoin Gold and Monero Included

Investors Rally Behind SUI’s Price Rise

Ethereum’s Liquid Staking Protocols Soar with $390M Inflow in 27 Days

The US SEC delays its decision on Hashdex's proposed Bitcoin-Ethereum ETF

Investors Expect FET Price Surge

Join our free newsletter for daily crypto updates!