BitGo Hands Its Wrapped Bitcoin Product to BiT Global and Justin Sun, Raising MakerDAO Concerns

Having previously operated the product, BitGo will now be a "minority shareholder" in the new venture.

BitGo is making a major change to its popular wrapped bitcoin (WBTC) product, and the move is raising eyebrows in the crypto community.

The WBTC product, which allows users to wrap their bitcoin in a different token standard, is currently offered on several different chains. The largest and most important of these is the WBTC on Ethereum. There are currently over 154,000 WBTC on Ethereum from this product, which is valued at over $9 billion.

BitGo also offers WBTC on Base, Kava, Osmosis, and Tron, but these products are a tiny fraction of the size of the WBTC on Ethereum.

Now, BitGo is pivoting and becoming a “minority shareholder” in the new venture, which will be operated by BiT Global (or maybe it’s BitGlobal. The company — formerly Bithumb — switches between the names on the English version of its website) and Justin Sun.

MakerDAO delegates are reacting to the news about the change by suggesting that the limits for WBTC as collateral be reduced.

Mike Belshe, the founder and CEO of BitGo, jumped in to the discussion but was unable to share BiT Global’s ultimate beneficial ownership, directors, and officers. However, he did note that “if BiT Global is fully compromised…the treasury could be at risk.”

Sun himself has taken to X (formerly Twitter) to quell fears, falsely claiming that the product is being audited, asserting that his involvement is “entirely strategic,” and further claiming that he does “not control the private keys to the WBTC reserves.”

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…

As you would expect for a ‘Wrapped’ product, BitGo currently publishes the addresses where it holds the bitcoins for this product, which Sun seems to falsely believe constitutes an audit.

Justin Sun’s Other WBTC

Sun has previously been involved with another WBTC product on Tron, which is far more popular.

The WBTC on Tron product currently offered by BitGo has less than 100 WBTC on Tron. This product is linked to the contract address TXpw8XeWYeTUd4quDskoUqeQPowRh4jY65.

However, this isn’t the WBTC that most people associate with Sun-related entities.

There is a separate WBTC on Tron product that was originally offered by Poloniex, a Sun-owned entity, and this one is vastly more popular.

It has approximately 112,000 tokens, which are supposedly backed by bitcoin, and is linked to the contract address TN3W4H6rK2ce4vX9YnFQHwKENnHjoxb3m9. That is approximately 1,120 times the size of the WBTC on Tron product that is currently offered by BitGo.

This product also makes up the majority of the bitcoin currently held on Sun-advised HTX.

Unlike the much smaller BitGo WBTC on Tron product, which discloses where the bitcoins backing it are held, neither HTX nor Poloniex have been willing to share where the much greater number of bitcoins for this product are held.

Sun’s past experience running wrapped bitcoin products without transparency that are used widely in the reserves of entities he advises raises numerous concerns about this transition.

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