Wrapped Bitcoin (WBTC) has moved from a U.S.-based custody model to one that spans three different countries. The new setup includes the same multi-signature technology, but control will be shared by the U.S., Singapore and Hong Kong.
The shift was completed on Oct. 8 after a 60-day transition period, but the rotation of WBTC’s bitcoin into a different multi-sig wallet briefly resulted in reporting errors on DeFiLlama, making it appear as if WBTC had lost 99% of its Total Value Locked (TVL).
“Housekeeping is done and all data has been updated,” said the WBTC team on X.
WBTC is a tokenized version of bitcoin that operates on the Ethereum blockchain. It is an ERC-20 token backed 1:1 with Bitcoin. WBTC transactions settle more quickly than native Bitcoin transactions, and the token is often used as collateral to participate in the world of decentralized finance (DeFi).
At the time of writing, WBTC had a circulating supply of 150,544 tokens and a market capitalization of $9.1 billion.
BitGo was the sole custodian of WBTC’s bitcoin until recently, when the entity announced a deal to transfer custody to a joint venture between BitGo and BiT Global.
BiT Global’s association with Tron founder Justin Sun — a somewhat controversial figure in the crypto space — prompted risk managers at DeFi giant Sky to propose offboarding WBTC as collateral.
“On the whole, we find that Sun’s involvement as a controlling interest in the new WBTC joint venture presents an unacceptable level of risk,” said Sky’s risk unit BA Labs.
However, BA Labs recently reconsidered its stance on the situation after discussions with BitGo CEO Mike Belshe.
Meanwhile, the amount of WBTC supplied to DeFi lending protocol Aave has increased since BitGo’s announcement. Data from @jacobrizzuto’s Dune dashboard shows that WBTC on Aave V3 on Ethereum reached a new all-time high of 37,000 in September.
