Today's news tips:
1. Celsius sued Tether for the return of $2.4 billion worth of Bitcoin, and Tether responded that it would defend the lawsuit
2. BitGo and BiT Global create a joint venture to transfer WBTC to a jurisdiction for custody
3. Jupiter Lianchuang: The Bitcoin behind WBTC should not be used for any purpose, and we hope BitGo will clarify the community’s doubts
4. Justin Sun: Participating in WBTC is purely strategic. I do not control the WBTC reserve private key and cannot move the reserve.
5. MakerDAO plans to initiate a proposal to reduce the size of WBTC collateral to cope with the potential risks of changes in custody rights
6. James Fickel, a long-term bull on ETH/BTC, reduced his position and sold 10,000 ETH in the past 5 hours to repay his loan
7. Galaxy Digital deposited 5,810 ETH to Binance about 8 hours ago and withdrew 14.38 million USDT
Regulatory News
US CFTC pays $1 million to whistleblower in digital asset case
The U.S. Commodity Futures Trading Commission (CFTC) announced on August 8 that it has paid a $1 million reward to a whistleblower for providing information that led to an enforcement action in the digital asset markets. The regulator said the whistleblower provided previously unknown details of improper trading.
The CFTC does not disclose the identity of the whistleblower, the specific enforcement action or the exact amount of the reward under the Commodity Exchange Act (CEA). CFTC Enforcement Director Ian McGinley praised the whistleblower, saying their information is critical as more Americans fall victim to digital asset scams.
Gemini co-founder: The Federal Reserve is controlling the channels for cryptocurrency companies to obtain banking services
In response to the Federal Reserve's enforcement action against Customers Bancorp, Tyler Winklevoss, co-founder of the cryptocurrency exchange Gemini, said that Customers Bancorp is one of the few banks in the United States that is friendly to cryptocurrencies. The Federal Reserve is now controlling the channels for cryptocurrency companies to obtain banking services, essentially deciding who can open a bank account and who cannot, thereby limiting the operational capabilities of crypto banks. It is reported that the Federal Reserve requires Customers Bancorp to give 30 days' notice before establishing any new banking relationship with crypto companies, which has caused dissatisfaction in the crypto community.
Project News
Tether: Will defend against Celsius' "extortion-like" lawsuit
Tether announced on its official website that it will defend against the "extortion-like" lawsuit filed by Celsius. Tether stated that Celsius Network Limited filed a lawsuit against Tether Limited and certain of its affiliates in the United States Bankruptcy Court for the Southern District of New York through Blockchain Recovery Investment Consortium, LLC, demanding that Tether return approximately $2.4 billion worth of Bitcoin. However, instead of recognizing the clear validity of the agreement reached by Celsius several years before its bankruptcy, this lawsuit attempted to improperly impose the costs of Celsius' mismanagement and failure on Tether. Tether stated that it would never fall victim to shameless litigation for profit, and therefore would resolutely refute the unwarranted accusations against it and look forward to winning this lawsuit.
BitGo: Creates a joint venture with BiT Global to transfer WBTC to custody in a jurisdiction
According to the BitGo blog, BitGo and BiT Global have partnered to create a joint venture to diversify WBTC's custody and cold storage businesses across multiple jurisdictions, and BitGo will become a minority shareholder in the new joint venture.
The joint venture will continue to use the same BitGo multi-signature technology and cold storage technology that has been used to protect Bitcoin since 2019, with the only difference being the ability to distribute keys in multiple locations around the world. The transition period for this custody change is 60 days. BiT Global is a global custody platform headquartered in Hong Kong, regulated and registered as a Trust and Company Service Provider (TCSP), with a strategic partnership with Justin Sun and the Tron ecosystem.
Jupiter Lianchuang: The Bitcoin behind WBTC should not be used for any purpose, and we hope BitGo can clarify the community’s doubts
Jupiter co-founder meow posted on the X platform that "when we founded WBTC a few years ago, we worked with Bitgo because we believed that it was crucial to have a partner who was as committed to custody as possible to custody Bitcoin. But the most important thing is that under no circumstances should the Bitcoin behind WBTC be used for any purpose. I am not going to make any judgments about Bitgo, they have indeed been an excellent custodian so far, and I believe they have the best intentions". For WBTC, the entire DeFi ecosystem, and BitGo/BiT Global, it is crucial to clarify a few things immediately:
1) Who are the multi-signers holding BTC?
2) Will BTC be used for any purpose?
3) What is the benefit to either party? Is it TRON adopting WBTC? If so, then there is certainly no need to get the whole setup.
4) How does cross-jurisdiction help?
5) Is it possible to have a very respected independent party join the multi-signature group and act as both a communicator and a signer?
Justin Sun: Participating in WBTC is purely strategic. I do not control the WBTC reserve private key and cannot move the reserve.
In response to "the community has some concerns about Sun Yuchen's participation in various projects including WBTC", Sun Yuchen issued a clarification on the X platform. He said that WBTC has not changed from before. The audit is conducted in real time and can be accessed at http://wbtc.network. The minting process is managed entirely by custodians Bitglobal and Bitgo according to the same procedures as before. In short, Bitglobal and Bitgo will not sign any unaudited transactions. The keys are still protected using the same Bitgo cold wallet technology and offline keys, and are backed up in multiple countries and regions. My participation in WBTC is entirely strategic. I do not control the private keys of the WBTC reserves and cannot move any BTC reserves.
MakerDAO plans to initiate a proposal to reduce the size of WBTC collateral to cope with the potential risks of custody changes
In view of the potential risks of changes in WBTC custody, MakerDAO plans to initiate a proposal to reduce the size of WBTC collateral in the executive vote on August 12. Among them:
Core Vault:
WBTC-A DC-IAM (maximum collateral): reduced from 500 million to 0
WBTC-B DC-IAM (maximum collateral): reduced from 250 million to 0
WBTC-C DC-IAM (maximum collateral): reduced from 500 million to 0
SparkLend：
Disable WBTC lending
Reduce WBTC LTV from 74% to 0%
BA Labs, a crypto risk analysis and assessment agency, believes that the integration of WBTC collateral on Maker and SparkLend will bring higher risks, and the above actions are taken to limit the growth of WBTC exposure.
The discussion reads that it is somewhat similar to the previous situation regarding the control of the TUSD stablecoin, which was discussed on the Maker forum. Since TUSD was placed under the control of Justin Sun, the market operation process and transparency have continued to deteriorate, including the resignation of the previous management team, the suspension of real-time reserve proof, and several major decouplings due to the interruption of redemption services. Other projects associated with Justin Sun have also been seen to show worrying signs of possible misappropriation, such as replacing Huobi's USDT reserves with stUSDT, an RWA project controlled by Sun that claims to hold US Treasury reserves but does not provide clear audits or evidence to prove these backings. Overall, Justin Sun's participation as a controlling stake in the new WBTC venture is an unacceptable level of risk.
It is also noted that Bitgo itself appears to have had some negative developments recently, including a failed acquisition by Galaxy Digital, which exited for undisclosed reasons. Coupled with the unexpected decision to divest WBTC products, this could be a sign of financial distress for Bitgo and negatively impacts Bitgo's counterparty risk. While some of the risk factors are somewhat speculative, it makes sense to exercise caution given the critical role WBTC collateral plays in DeFi.
Important data
Justin Sun transferred 500 BTC to Binance 6 hours ago and transferred 513.4 BTC to a new wallet
According to Spot On Chain, about 6 hours ago, Justin Sun transferred 500 BTC (US$30.3 million) to Binance and 513.4 BTC (US$31.2 million) to a new wallet. Since 2024, he has deposited a net 2,969 BTC (US$164 million) into HTX and Binance, with an average price of about US$55,185.
James Fickel, a long-term bull on ETH/BTC, reduced his position and sold 10,000 ETH in the past 5 hours to repay his loan
According to on-chain analyst Ember’s monitoring, James Fickel, a long-term bull on the ETH/BTC exchange rate, reduced his long position on the ETH/BTC exchange rate by selling 10,000 ETH in exchange for 425.75 WBTC ($26M) to repay his loans in the past 5 hours.
He borrowed WBTC from Aave from January to July this year and sold it for ETH to go long on the ETH/BTC exchange rate. His ETH/BTC exchange rate cost was around 0.054. After partially reducing his position today, his ETH/BTC exchange rate long position is still very large: he still has 2438.5 WBTC ($148M) borrowed.
Galaxy Digital deposited 5,810 ETH to Binance about 8 hours ago and withdrew 14.38 million USDT
According to The Data Nerd, Galaxy Digital deposited 5,810 ETH (about 15.17 million U.S. dollars) into Binance 8 hours ago and withdrew 14.38 million USDT. Yesterday, Galaxy Digital withdrew 1,097 MKR (about 2.2 million U.S. dollars) from Binance.
Currently, more than 41% of WBTC is used for lending, with MakerDAO being the largest use case (acceptor)
According to monitoring by ai_9684xtpa, WBTC currently supports Ethereum/Base/Kave/Osmosis/Tron networks, of which Ethereum mainnet minting accounts for as high as 99.8%. As of today, 154,726 WBTC (worth US$9.45 billion) have been minted, accounting for 0.78% of the total market value of Bitcoin. Dune panel data shows that currently more than 41% of WBTC is used in the lending ecosystem, of which the largest usage scenario (acceptor) is MakerDAO, and nearly 32% is used for direct transactions.
WBTC (Wrapped Bitcoin) is an ER20 token issued on the Ethereum network, whose value is pegged to Bitcoin at a one-to-one ratio; each WBTC has a corresponding Bitcoin as a reserve, which is managed by a custodian (currently Bitgo) to ensure that WBTC holders can redeem it for Bitcoin at any time. WBTC was first proposed in 2017, and the white paper was officially released and put into use in 2019. By 2020, the scale of locked BTC has exceeded US$2.1 billion.
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