BitGo CEO Responds to Security Concerns About WBTC

BitGo has recently taken steps to expand its Wrapped Bitcoin custodial locations, which has raised some alarms, particularly concerning Justin Sun’s participation.

CEO’s Position on Security Risks

Mike Belshe, the CEO of BitGo, has downplayed apprehensions regarding Justin Sun’s role in the Wrapped Bitcoin (WBTC) operations, asserting that the integrity and transparency of the platform remain intact.

On August 9, BitGo disclosed updates to its WBTC services, announcing a shift in custodial jurisdictions from the United States to include locations such as Singapore and Hong Kong. This initiative is part of a collaborative effort with Hong Kong-based BiT Global, involving a strategic alliance encompassing BitGo, the Tron ecosystem, and Justin Sun, the CEO of Tron.

Despite the initiative, concerns have been articulated about Sun’s association with the project. Block Analitica Labs (BA Labs), a risk management company, has issued warnings of “elevated levels of risk,” citing previous operational and transparency issues linked to crypto projects involving Sun.

In a post on the MakerDAO forum dated August 11, BA Labs suggested halting the creation of new WBTC debts and restricting further borrowing against WBTC collateral in a forthcoming executive vote.

Belshe’s Assurance on WBTC Security

In response to these concerns, Belshe has indicated that the uproar stems more from Sun’s name than from any substantive changes. He communicated on the MakerDAO forum that the foundational security protocols for WBTC remain unchanged.

Belshe emphasized that BitGo continues to co-sign all transactions using established technologies, ensuring that no transaction will be authorized without the requisite mint Bitcoin deposit or ownership of the burn token.

“Merchants still operate under the same structure. The only remaining risk pertains to the underlying treasury, which now has its keys divided among various parties in a way that wasn’t previously the case.”

Justin Sun also weighed in on the issue. In an August 11 post on social media platform X, he mirrored Belshe’s assurances, stating that there have been no alterations to WBTC operations and that he does not have direct access to any funds.

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

Sun clarified his involvement, saying, “My personal role in WBTC is entirely strategic. I do not control the private keys to the WBTC reserves and cannot transfer any BTC reserves.”

As a next step, the team at BA Labs has suggested an executive vote scheduled for August 12 to determine the future direction of the DAO’s WBTC holdings.