BitGo CEO argues WBTC security is unchanged amid concerns

BitGo recently announced a new venture to diversify its Wrapped Bitcoin custodial locations, and Justin Sun’s involvement has caused concern for some.

BitGo CEO Mike Belshe has brushed off claims that Justin Sun’s involvement in its Wrapped Bitcoin business will somehow impact its security or transparency. 

On Aug. 9, cryptocurrency custody platform BitGo announced changes to its Wrapped Bitcoin (WBTC) business, diversifying its custodial jurisdictions for the underlying Bitcoin (BTC) — previously held in the United States — to locations including Singapore and Hong Kong.

The joint venture involves Hong Kong-based BiT Global and a “strategic partnership” between BitGo, the Tron ecosystem and Tron CEO Justin Sun.

However, some concerns have been raised over Sun’s involvement.

Risk management firm Block Analitica Labs (BA Labs) warned of “elevated levels of risk,” claiming crypto projects Justin Sun has been connected to that have faced operational and transparency problems.

In an Aug. 11 post on the MakerDAO forum, BA Labs proposed closing all new WBTC debts and preventing new borrowing against WBTC collateral in an upcoming executive vote.

BitGo CEO says its “nothing to blink about”

But BitGo CEO Mike Belshe has played down concerns, arguing the controversy is a “reaction to the Justin Sun name than to facts.”

In the MakerDAO forum, where the BA Lab’s proposed changes were published, Belshe said the underlying WBTC security protocols are not in danger, they will remain the “same as what you have today.”

“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,” he said.

“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 also addressed the controversy in an Aug. 11 post on social media platform X, echoing Belshe’s sentiment that there have been “no changes to WBTC,” and his involvement doesn’t include having any direct access to funds.

“The keys are still safeguarded using the same Bitgo cold wallet technology and offline keys, with backups in multiple countries and regions,” he 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.”

The BA Labs team has proposed an executive vote for Aug. 12 to decide if the DAO will move forward with the changes to its WBTC holdings.