As a seasoned researcher who has witnessed the evolution of cryptocurrencies over the past decade, I find myself intrigued by this ongoing saga between Justin Sun and the wrapped Bitcoin (WBTC) ecosystem. The latest developments involving Coinbase’s cbBTC and the controversy surrounding WBTC’s custody arrangements have certainly added another layer of complexity to an already convoluted landscape.
On September 12th, Justin Sun criticized Coinbase in a post, asserting that the launch of their wrapped Bitcoin was a “disappointing day” for Bitcoin.
Sun noted that cbBTC does not provide evidence of its reserves, doesn’t undergo external audits, and has the ability to restrict users’ balances at its discretion. Essentially, he implied that it operates on a “take my word for it” basis, as any U.S. government subpoena could potentially seize all of your Bitcoin.
“There’s no better representation of central bank Bitcoin than this.”
On September 12, it was announced through CryptoPotato that the U.S. based cryptocurrency platform introduced their cbBTC token on the Ethereum blockchain and its layer-2 network.
Sun stated that he is acquainted with numerous creators of DeFi protocols, and he warned that incorporating cbBTC could potentially lead to significant security threats within the realm of decentralized finance.
“There is no more ridiculous combination in the world than putting central banks and Bitcoin together. I imagine this is a day Satoshi Nakamoto could never have envisioned when creating Bitcoin,” Sun continued.
cbbtc=central bank btc. There is no more ridiculous combination in the world than putting central banks and Bitcoin together. I imagine this is a day Satoshi Nakamoto could never have envisioned when creating Bitcoin.
— H.E. Justin Sun(hiring) (@justinsuntron) September 12, 2024
But There’s More …
The creator of Tron is currently embroiled in a dispute, centered around a competing product, the prevailing industry benchmark, and the most popular version of wrapped Bitcoin, WBTC. In August, the custodian of WBTC, BitGo, unveiled a collaboration with BitGlobal, a company based in Hong Kong, to broaden their custody operations and improve cold storage.
BitGlobal, previously known as Bithumb Global, is linked to Justin Sun through common directors and business structures. However, despite claims of a decentralized governance structure for WBTC, it seems that the major DAO was not involved in discussions about the custody change, as reported by Protos at the time.
Under the revised management structure, both BitGlobal and BitGo will now jointly manage access to the keys, with BitGo Singapore Ltd. recently incorporated into this arrangement.
Another way of expressing this could be: “The Sun is also linked to a competing Bitcoin product wrapped on the Tron network, which has raised questions about its transparency regarding Bitcoin storage and security measures. These concerns have been echoed in the cryptocurrency and DeFi sectors that make use of Wrapped Bitcoin (WBTC).
Approximately 152,958 Bitcoins are wrapped and stored on the Ethereum blockchain, as per the official transaction records. The combined value of these Bitcoin, currently estimated at around $8.8 billion, represents a decrease of roughly 44% compared to its highest point in November 2021.
Sky Drops WBTC
As a financial analyst, I’m sharing that the trailblazer in Decentralized Finance (DeFi), previously recognized as Maker but now rebranded as Sky, has proposed an interesting shift in its SparkLend liquidity protocol. In a recent post on their forum dated September 12th, they expressed their intention to eliminate all Wrapped Bitcoin Collateral (WBTC) from this specific protocol.
From the information at hand, it appears that Justin Sun or his associates are very probably the ultimate owners of BitGlobal. This ownership seems to be hidden using shell corporations and stand-in directors.
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2024-09-13 11:03