BitGo's Defense of Wrapped Bitcoin Partnership
In a recent development, BitGo's CEO, Mike Belshe, has come forward to address the criticisms surrounding the company's partnership with BiT Global for managing Wrapped Bitcoin (WBTC). Concerns have been raised due to BiT Global's connections with Justin Sun, the founder of Tron. Belshe argues that critics are not being "intellectually honest" in their evaluations.
Enhancing Security and Eliminating Failures
The collaboration with BiT Global, a crypto custodian based in Hong Kong, is aimed at improving security and expanding BitGo's operations in Asia. The core strategy involves distributing key custody across multiple institutions, thereby minimizing single points of failure. This method enhances the safety of digital assets, a priority for BitGo. "The model we propose is far superior," Belshe stated, highlighting the robustness of the security measures in place.
Criticism from Competitors
Some competitors, like Threshold, have proposed merging their BTC wrapper, tBTC, with WBTC, citing concerns about WBTC's control structure. Belshe rebuffs these critiques, suggesting they are self-serving attempts to elevate their own token's market value. "Criticizing our decentralization efforts just to boost their token's value is beyond ridiculous," he commented.
Coinbase's Entry into Wrapped Bitcoin Field
Coinbase, another major player, has hinted at launching its own wrapped bitcoin product, cbBTC, on the Base blockchain. Belshe views this as contradictory to the principles of decentralized finance (DeFi). He believes appointing Coinbase as a central authority in DeFi could undermine the sector's foundational ethos.
Understanding BiT Global's Role
Belshe emphasizes that many critiques miss the legal structure of BiT Global. As a licensed Trust or Company Service Provider (TCSP) in Hong Kong, BiT Global has a fiduciary responsibility to safeguard the bitcoin it manages. This legal obligation aligns with BitGo's mission to protect client assets, regardless of where they are stored. "We are a fiduciary today, and it’s our duty to ensure that the assets are protected," Belshe explained.
Transparency and Community Engagement
Despite Justin Sun's controversial reputation, Belshe stresses the importance of transparency in the partnership. "Most companies wouldn't mention his name, but we did. Because transparency matters," he noted. BitGo encourages the community to engage with and scrutinize the partnership, fostering trust and accountability. On-chain data supports this approach, showing no significant withdrawal of WBTC, indicating maintained confidence in the system.
Selection of Qualified Custodians
Belshe concludes by stating that the choice of custodian should be based on qualifications, not affiliations. BiT Global, although part of Justin Sun's portfolio, operates autonomously, ensuring unbiased asset management.
