Sky to Remove WBTC as Collateral Due to Concerns Over Justin Sun

Sky, formerly Maker, is planning to remove Wrapped Bitcoin ($WBTC) as collateral from its platform due to concerns about Justin Sun’s potential influence over its restructuring. A proposal from BA Labs, shared on Sky’s governance forum, suggests that Sun or his affiliates might have hidden control over BitGlobal, one of the entities involved in the restructuring of $WBTC. This restructuring would see BitGo, the issuer of $WBTC, transfer control to a joint venture with BitGlobal, which is linked to Sun’s Tron ecosystem.

Currently, $WBTC represents $73 million in collateral on Sky’s platform, supporting $127 million in DAI, and contributes $15 million in annual revenue. To minimize disruption, Sky will gradually increase liquidation thresholds until $WBTC is fully offboarded by October 8, 2024. During this transition, Sky is considering alternatives such as Coinbase’s $cbBTC and Threshold’s $tBTC to replace $WBTC, aiming for more secure and diversified options for its collateral requirements.