Justin Sun’s role in BitGo’s WBTC protection plan is worrying

BitGo, the leading crypto custody platform, will transition Wrapped Bitcoin (WBTC) to a new multi-legal and multi-institutional custody model. This decision raised concerns in the crypto community, especially due to the involvement of Justin Sun, the founder of the TRON blockchain.

On August 9, BitGo announced a 60-day transition period. The company also plans to expand its portfolio to include Hong Kong and Singapore.

The role of the sun in WBTC conservation raises concerns

In response to this development, popular DeFi platform MakerDAO has begun evaluating the risks associated with BitGo's new WBTC escrow strategy. The MakerDAO community is considering an idea that would effectively reduce all WBTC liabilities on the network to zero.

The proposal highlights concerns that this new move could have a significant impact on WBTC for solar. Additionally, he cites Sun's past dealings with other crypto projects, such as TUSD and Huobi's USDT stock, which have been plagued by operational and transparency issues.

The broader crypto community has echoed these concerns. Some stakeholders are concerned that Sun may use its influence to suppress excessive WBTC or use authentication data.

“BitGo partnering with Justin Sun to secure WBTC is one of the craziest business decisions I've ever seen,” said Alex Bergeron, a columnist for BitGo Magazine.

Read more: What is Bitcoin? The ultimate guide to Cryptocurrency

Meanwhile, BitGo CEO Mike Belshe has countered these concerns. He said the platform's security architecture prevents any form of fraud. He also emphasized that BitGo does not allow withdrawals without a corresponding BTC deposit.

We understand that the community wants to know about JS's involvement in anything, even if it doesn't have the ability to move money. That's why we made sure to be clear about the name,” Belshe said.

The CEO of BitGO urged the public to exercise deep caution before jumping to conclusions. According to him, although Sun is participating in the project, it does not have the authority to mobilize funds. The WBTC website will continue to operate, Balshe said.

Read More: Wrapped Bitcoin (WBTC) Price Prediction 2024, 2025, 2026, 2027, 2028

For his part, Sun explained that his role with WBTC is purely strategic. He confirmed that the WBTC backup does not control the private keys and cannot access the BTC backup as rumored. Sun emphasized that his participation aims to strengthen decentralization, security protocols and security, which will strengthen the important role of digital assets in the DeFi ecosystem.

“Simply put, BitGlobal and BitGo do not sign transactions that have not been audited. The keys are still protected using the same Bitgo cold wallet technology and offline keys, backed up in multiple countries and regions,” added Sun.