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Wrapped Bitcoin

Bitcoin

Wrapped Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/wrapped-bitcoin-price-index" rel="noopener noreferrer nofollow" target="null" text="null" title="null">WBTC</a>) — a tokenized version of Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow" target="null" text="null" title="null">BTC</a>) that exists on the Ethereum network and is redeemable for BTC at a 1:1 ratio — has completed a shift to a geographically distributed custody structure.
Control of the underlying Bitcoin will now be shared between Singapore, Hong Kong, and the United States in a <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitgo-wrapped-bitcoin-custody-multi-jurisdictions-institutions-tron-united-states" rel="noopener noreferrer nofollow" target="null" text="null" title="null">partnership agreement between BitGo and BiT Global</a>.
The new custody structure uses a multisignature agreement, which requires two signatures to approve any transaction and shift funds from the wallet. Following the successful pivot to multi-jurisdiction custody, BiT Global issued this statement:&nbsp;&nbsp;
<blockquote>
 “With diversified geographical jurisdiction that includes the United States, Hong Kong, and Singapore, we ensure that no single jurisdiction/entity controls the custody of wrapped Bitcoin assets.”
</blockquote>
The transition has not affected how Wrapped Bitcoin works on the user side; however, the <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitgo-ceo-argues-wbtc-security-unchanged-amid-concerns" rel="noopener noreferrer nofollow" target="null" text="null" title="null">announcement sparked concerns</a> from some users over Justin Sun’s involvement in the custody arrangement.
<figure><img alt="WBTC completes shift to multi-jurisdiction custody arrangement" src="https://s3.cointelegraph.com/uploads/2024-10/01927287-5083-720e-9f2e-e3ee9823e9b0" title="">
 <figcaption style="text-align: center;">
 Wrapped BTC activity January 2019- September 2024. Source: CryptoQuant
 </figcaption>
</figure>
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/wrapped-bitcoin-mint-coinbase-cbbtc" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Stop panicking about Wrapped Bitcoin — There are other coins</a>
<h2 id="the-sky-community-votes-to-drop-wbtc-as-a-collateral-asset">The Sky community votes to drop WBTC as a collateral asset</h2>
Sky — a decentralized lending platform formerly known as Maker — first proposed dropping WBTC as a collateral asset in an Aug. 9 <a data-ct-non-breakable="null" href="https://forum.sky.money/t/wbtc-changes-and-risk-mitigation-10-august-2024/24844" rel="noopener noreferrer nofollow" target="null" text="null" title="null">post</a> in the governance section of its community forum due to Sun’s purported involvement in the project.
At the time, the BA Labs team <a data-ct-non-breakable="null" href="https://forum.sky.money/t/tusd-is-undergoing-a-material-change-to-its-ownership-structure-is-there-a-process-for-reducing-exposure-in-the-event-of-a-material-change/5691" rel="noopener noreferrer nofollow" target="null" text="null" title="null">cited</a> Sun’s previous involvement with the TrueUSD (<a data-ct-non-breakable="null" href="https://cointelegraph.com/trueusd-price-index" rel="noopener noreferrer nofollow" target="null" text="null" title="null">TUSD</a>) stablecoin as concerning and argued that it warranted limiting the platform’s exposure to WBTC:
<blockquote>
 "Since TUSD was placed into Justin Sun’s control, it has seen market deterioration in operational processes and transparency, including the resignation of the previous management team, suspension of real-time proof of reserves, and several significant depegs caused by interruptions in redemption service."
</blockquote>
Following a governance vote on Sept. 19, the Sky community <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sky-maker-going-ahead-plan-offboard-wrapped-bitcoin" rel="noopener noreferrer nofollow" target="null" text="null" title="null">voted to remove WBTC</a> as a collateral asset from the platform — with 88% voting in favor of dropping the tokenized asset.
However, despite the results of the vote, Sky is now <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sky-reconsiders-wbtc-offboaring-plan-following-discussion-bitgo-ceo" rel="noopener noreferrer nofollow" target="null" text="null" title="null">reconsidering removing WBTC</a> from the platform following a conversation with BitGo co-founder Mike Belshe, who assuaged community fears about the new custody arrangement.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/bitcoin-layer2-sidechains-not-really-bitcoin-l2s/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">‘Bitcoin layer 2s’ aren’t really L2s at all: Here’s why that matters</a>

WBTC completes shift to multi-jurisdiction custody arrangement

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