BitGo CEO Says Wrapped Bitcoin’s Critics Aren’t Being ‘Intellectually Honest’ About Their Concerns

The loudest critics of BitGo's deal with Justin Sun-affiliated BiT Global also want to see their 'number go up.'

BitGo’s deal with BiT Global, a Hong Kong-based crypto custodian, has drawn criticism from some quarters. However, BitGo CEO Mike Belshe believes that this criticism lacks intellectual honesty.

One of the loudest critics, Threshold, has proposed merging its BTC wrapper, tBTC, into Wrapped Bitcoin (wBTC) to address concerns over the shift in control. But Belshe points out that Threshold’s own stated goal is to increase the value of its token.

“They’ve even said publicly that if they had all of Wrapped Bitcoin’s market share, their token's value would be 35 times higher. I understand that they want their token to go up, but we’re facing attacks from every tBTC holder who wants to see that happen,” Belshe said. “Let’s be intellectually honest here: criticizing our efforts to decentralize Wrapped Bitcoin just to boost their token’s value is beyond ridiculous."

Another competitor in the works is cbBTC, an offering from Base blockchain, which Belshe said he finds interesting. However, he believes that if cbBTC were to gain a following and the “DeFi community picks central bank Coinbase as the ultimate steward, then I think all DeFi hope should be lost.”

"Of course, the central bank, CB, Coinbase, they also would love to have Wrapped Bitcoin under their belt. There is no doubt that the model that BitGo is proposing, how we're going to store the keys, is far superior to anything that Coinbase can or would concoct."

Belshe also noted that many critics may not fully understand the legal structure of BiT Global. The company is licensed as a Trust or Company Service Provider (TCSP) in Hong Kong, which gives it a fiduciary duty – like BitGo – to the Wrapped Bitcoin DAO to ensure the security of the bitcoin in its custody.

"We are a fiduciary today, and it’s our duty to ensure that the assets are protected, regardless of where they are held," he said.

Ultimately, the deal is about “eliminating single points of failure” and expanding BitGo’s footprint in Asia, Belshe said.

"We use deep cold storage, separating keys across multiple people, he said. “And now we're taking it a step further by separating them across multiple institutions."

Despite an initial strong reaction from some in the MakerDAO community, on-chain data shows that there hasn’t been a mass exodus out of wBTC via burns.

"It’s not like a 'why Sun' type of thing. It’s about who is a qualified custodian that can receive these assets," he continued.

And that qualified custodian just happens to be in Justin Sun’s portfolio. But it's a portfolio company he can’t control by its very design.