The collaboration was described as a strategic partnership between BitGo, the Tron ecosystem, and Justin Sun
BitGo recently informed the public that Wrapped Bitcoin (WBTC) will be undergoing a change in its custodial arrangement.
BitGo, the custodian of WBTC, revealed that in a strategic partnership, they will become a minority owner in the new joint venture involving BiT Global, which is based in Hong Kong. This new partnership will allow the custodial jurisdictions of Bitcoin-backed WBTC to be diversified in locations outside of the United States.
New Partnership Sparks Debate: Justin Sun’s Involvement Raises Eyebrows
The partnership has sparked some concern within the crypto community, especially because of the involvement of Justin Sun, the founder of Tron. The collaboration was described as a strategic partnership between BitGo, the Tron ecosystem, and Justin Sun.
Block Analytica Labs (BA Labs), a risk management firm, stated that Sun’s involvement is an unacceptable level of risk due to his involvement in projects that have faced operational and transparency issues in the past. However, despite the increasing concern, BitGo CEO Mike Belshe has allayed many fears.
Mike stated in the MakerDAO forum that the worry is a reaction to Justin Sun’s name rather than a fact. He said the reaction was well anticipated, which is why his involvement was announced earlier.
He noted that the security and transparency of WBTC will remain intact, saying that the firm will still be co-signing all transactions using the same technology and that the keys will be separated across multiple parties in a way they weren’t before. Still, the security protocols will remain the same. Mike said:
“Further, BitGo is still co-signing all transactions using the same technology it always had; BitGo simply will not sign a transaction that does not have the corresponding mint (BTC deposit) or burn (token ownership). Merchants also still exist. This leaves the remaining risk of the underlying treasury itself, with keys now being separated across parties in a way they never were before.”
Sun has also addressed the controversy; he noted on his X page that his personal involvement in WBTC is “entirely strategic” and that he does not have direct access to the WBTC reserves or the ability to move any of the Bitcoin backing the tokens. He also emphasized that no changes have been made to how WBTC is managed and arranged. Sun said:
“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.”
Community members also raised concerns, questioning WBTC’s focus compared to other centralized assets. Despite the controversy and concerns, Belshe maintained his stand on the security and new custodial arrangement. He noted that people will realize this once they conduct proper due diligence. The MakerDAO community is set to vote on August 12 to decide whether to move forward with the proposed changes to its WBTC holdings.
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