BitGo CEO Mike Belshe reiterated the security of bitcoin (BTC) that backs wrapped Bitcoin (wBTC) during a discussion on X Spaces. This token allows BTC to be used on blockchains other than the original Bitcoin system. Belshe’s statement came in response to concerns raised by MakerDAO, the issuer of the DAI stablecoin, over a proposal to move custody of wBTC to be jointly managed with BiT Global, an entity partially controlled by Tron founder Justin Sun.
Distributed Cryptographic Keys and Security
During the online discussion, Belshe clarified that Justin Sun does not have access to the keys to BitGo’s assets. The cryptographic keys for wBTC, according to Belshe, will be distributed across BitGo entities in the United States, Singapore, and BiT Global. This approach ensures that no single party has exclusive control or the ability to mint or steal from the underlying funds. Belshe emphasized that Sun is not an employee of BiT Global, and explained that the company is structured as a public holding company in Hong Kong with a fiduciary duty to protect client assets. In accordance with local laws, no individual can own more than 20% of the company.
MakerDAO Decision to Reduce Exposure to wBTC
MakerDAO recently passed a motion to eliminate its wBTC exposure due to concerns about centralization of control with BiT Global. The decision, which will be effective after 1:24 PM UTC on August 15, aims to prevent further borrowing from wBTC vaults while keeping existing positions unchanged. Despite the concerns, Dune data shows that wBTC remains stable, with no significant changes in burn volume, or redemption of wBTC for bitcoin, as users look for alternatives. Meanwhile, cryptocurrency exchange Coinbase has indicated that it may be preparing its own wrapped version of BTC, called cbBTC, as another alternative on the market.