BitGo’s partnership with BiT Global sparks controversy over Justin Sun’s involvement

Cryptocurrency custody platform BitGo recently announced plans to transfer its Wrapped Bitcoin (WBTC) business to a joint venture with Hong Kong-based BiT Global.

The move, aimed at improving security through a multi-jurisdictional and multi-institutional custody structure, has sparked backlash due to the involvement of controversial crypto figure Justin Sun.

Backlash against Justin Sun’s involvement

In an August 10 post on X, BitGo CEO Mike Belshe confirmed Justin Sun’s involvement in the company’s new partnership. Belshe stressed that BitGo had disclosed Sun’s role early on to ensure transparency even though it did not have the authority to move any funds unilaterally.

Yes, everyone should take a close look at the new setup. That’s why we made a 60-day announcement, to allow enough time for due diligence.

We recognize that the community wants to know about JS’s involvement in anything, even though it doesn’t have the ability to move funds. This is…

— Mike Belshe (@mikebelshe) August 10, 2024

However, the announcement has faced considerable criticism from the crypto community, with many concerned about the involvement of Tron’s founder. In a MakerDAO forum, the company specifically pointed to Sun’s involvement as a significant risk.

The organization pointed to past problems with Sun’s companies, such as decreased transparency and operations at TUSD under its control. They also mentioned replacing Huobi’s USDT reserves with stUSDT, a project controlled by Sun that claims to hold US Treasuries without clear audits or supporting evidence.

MakerDAO expressed serious reservations about the security of the new partnership, stating that it may consider removing WBTC from its platforms if BitGo does not provide sufficient guarantees.

“We will consider further recommendations for parameter changes to protect the protocol and mitigate counterparty risks, including the possible complete deactivation of all Maker and Spark WBTC escrow integrations,” the firm said.

Belshe responds to concerns

In response, Belshe dismissed MakerDAO’s concerns as more about Sun’s reputation than any real risk. “This seems to be more of a reaction to the name Justin Sun than to the facts,” he commented, suggesting the apprehension may be more rooted in perception than reality.

Belshe added that BitGo anticipated this reaction, which is why they were upfront about Sun’s involvement despite their lack of direct control over WBTC reserves.

Justin Sun also addressed the controversy, clarifying his role in the WBTC venture in a separate post on August 10. He emphasized that his involvement is purely strategic and that he does not control the private keys of WBTC reserves, nor can he move any Bitcoin reserves.

Sun assured the community that the WBTC minting process remains unchanged, and BitGlobal and BitGo custodians continue to manage it according to the same procedures.

Recently, I have heard that the community has some concerns about my involvement in various projects, including WBTC. I would like to clarify the following points:

There has been no change in WBTC compared to before. Audits are performed in real time and can be accessed through…

— HE Justin Sun 孙宇晨 (@justinsuntron) August 10, 2024

“There have been no changes to WBTC compared to before,” Sun noted, stressing that all audits are performed in real-time and accessible through the WBTC network.

He further explained that the keys are protected using BitGo’s cold wallet technology, with backups spread across multiple countries and regions.

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