**BitGo's Transition to a New Custody Model**
BitGo, a leading crypto custodial platform, is transitioning its Wrapped Bitcoin (WBTC) to a new multi-jurisdictional and multi-institutional custody model. This move, announced on August 9, includes a 60-day transition period and plans to expand custodial locations to Hong Kong and Singapore.
**Concerns Over Justin Sun's Involvement**
The involvement of Justin Sun, founder of the TRON blockchain, in this new custody model has sparked concerns within the crypto community. Prominent DeFi platform MakerDAO is assessing the potential risks associated with BitGo’s new strategy. They are considering a proposal to reduce all active WBTC debts on their network to zero, fearing that Sun might gain significant influence over WBTC.
**Past Issues and Community Reactions**
The proposal from MakerDAO references past issues with Sun’s involvement in other crypto projects, such as TUSD and Huobi’s USDT reserves, which faced operational and transparency problems. The broader crypto community shares these concerns, with some stakeholders worried that Sun could exploit his influence to mint excessive WBTC or manipulate Proof-of-Reserve data.
**BitGo's Assurance and Sun's Clarification**
BitGo CEO Mike Belshe has addressed these concerns, asserting that the platform’s security architecture prevents any form of manipulation. He emphasized that BitGo will not authorize any minting without a corresponding BTC deposit and urged the community to conduct thorough due diligence. Belshe also clarified that while Sun is involved in the project, he lacks the authority to move funds. The WBTC website will continue to provide near real-time proof of reserves.
Justin Sun has also clarified his role, stating that his involvement is purely strategic. He assured that he does not control the private keys to the WBTC reserves and cannot access the BTC reserves. Sun emphasized that his involvement aims to bolster decentralization, security protocols, and safety, reinforcing the critical role of WBTC in the DeFi ecosystem¹²³.
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SOURCE : beincrypto
