BitGo to Transfer Control of WBTC, Justin Sun Says Involvement Strategic

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Tanzeel Akhtar

Journalist

Tanzeel Akhtar

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Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk, Bitcoin Magazine and Bitcoin.com.

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August 12, 2024 01:52 EDT

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Crypto custody platform Bitgo is planning to move the wrapped bitcoin (WBTC) product to its joint venture with Hong Kong-based BiT Global which is triggering a backlash due to Justin Sun’s involvement.

Sun, the founder of TRON Foundation, shared a statement explaining that his involvement in WBTC is entirely strategic. There have been no changes to WBTC compared to before, added Sun.

BitGo said there will be a 60-day transition period for the transfer. The joint venture with BiT Global will mean crypto custody being split including Hong Kong and Singapore. There is concern that Sun will have significant influence or control over the joint venture BiT Global (connected to TRON foundation) managing WBTC.

Feedback within the crypto community has been critical with many criticising the BitGo partnership.

BitGo CEO Mike Belshe addressed these concerns in a MakerDAO forum, said: “We too were concerned that some would react this way to his name, which is why we made sure to announce his involvement up front, even though he won’t actually have the ability to move any funds arbitrarily.”

Belshe stressed everyone should get comfortable with this latest transition but some may opt out. The CEO went on to add he was happy to discuss the regulatory structure and the backing of WBTC.

What Is WBTC?

WBTC is an ERC-20 token that represents Bitcoin on the Ethereum blockchain. It allows Bitcoin holders to use their BTC within the Ethereum ecosystem, leveraging its decentralized applications (dApps) and smart contracts.

WBTC is pegged to Bitcoin which means that each WBTC is backed 1:1 by actual Bitcoin held in reserve by a network of custodians. This ensures that the value of WBTC closely mirrors that of Bitcoin.

WBTC is governed by a decentralized autonomous organization called the WBTC DAO. The DAO includes members from various projects and companies in the blockchain space. This DAO oversees the management and development of WBTC.