Wrapped Bitcoin (WBTC) — a tokenized version of Bitcoin (BTC) that exists on the Ethereum network and is redeemable for BTC at a 1:1 ratio — has completed a shift to a geographically distributed custody structure.
Control of the underlying Bitcoin will now be shared between Singapore, Hong Kong, and the United States in a partnership agreement between BitGo and BiT Global.
The new custody structure uses a multisignature agreement, which requires two signatures to approve any transaction and shift funds from the wallet. Following the successful pivot to multi-jurisdiction custody, BiT Global issued this statement:
“With diversified geographical jurisdiction that includes the United States, Hong Kong, and Singapore, we ensure that no single jurisdiction/entity controls the custody of wrapped Bitcoin assets.”
The transition has not affected how Wrapped Bitcoin works on the user side; however, the announcement sparked concerns from some users over Justin Sun’s involvement in the custody arrangement.
Wrapped BTC activity January 2019- September 2024. Source: CryptoQuant
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The Sky community votes to drop WBTC as a collateral asset
Sky — a decentralized lending platform formerly known as Maker — first proposed dropping WBTC as a collateral asset in an Aug. 9 post in the governance section of its community forum due to Sun’s purported involvement in the project.
At the time, the BA Labs team cited Sun’s previous involvement with the TrueUSD (TUSD) stablecoin as concerning and argued that it warranted limiting the platform’s exposure to WBTC:
"Since TUSD was placed into Justin Sun’s control, it has seen market deterioration in operational processes and transparency, including the resignation of the previous management team, suspension of real-time proof of reserves, and several significant depegs caused by interruptions in redemption service."
Following a governance vote on Sept. 19, the Sky community voted to remove WBTC as a collateral asset from the platform — with 88% voting in favor of dropping the tokenized asset.
However, despite the results of the vote, Sky is now reconsidering removing WBTC from the platform following a conversation with BitGo co-founder Mike Belshe, who assuaged community fears about the new custody arrangement.
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