In a bold move to fortify its security infrastructure, BitGo, a leading cryptocurrency custody platform, is shifting its Wrapped Bitcoin (WBTC) operations into a multi-jurisdictional and multi-institutional custody framework. This strategic transformation aims to elevate the safety and robustness of its custodial services.

Diversifying Custodial Territories

Currently, BitGo’s WBTC custody and cold storage operations are concentrated within the United States. However, as per the announcement on August 9, the company has initiated a comprehensive 60-day transition phase. This pivotal shift will see BitGo diversifying its custodial operations across multiple global jurisdictions, including Hong Kong and Singapore. This move is designed to minimize regional vulnerabilities and enhance the overall security posture for the underlying Bitcoin (BTC), currently priced at $58,289.

WBTC, which mirrors the value of Bitcoin, serves as a bridge enabling users to interact seamlessly with Ethereum-based decentralized finance (DeFi) protocols and decentralized exchanges (DEXs).

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Preserving Multi-Signature Integrity

In this transition, BitGo has reaffirmed its commitment to maintaining the integrity of its multi-signature (multi-sig) technology and deep cold storage mechanisms. This technological backbone will now extend across multiple global locations, thereby diluting the risk associated with any single point of failure.

BitGo underscored that this transition would be executed with “frictionless and transparent” precision, with full completion anticipated by October 8. Notably, BitGo’s CEO highlighted the significant involvement of the Tron Network and its founder, Justin Sun, in this strategic evolution.

The Role of Tron and Justin Sun

BitGo’s CEO, Mike Belsche, confirmed in an August 10 post on X (formerly Twitter) that the joint venture driving this custody transformation includes BitGo, Justin Sun, and the broader Tron ecosystem. Importantly, Belsche clarified that despite Sun’s involvement, he would not have the ability to move funds—a critical distinction given the ongoing legal scrutiny Sun faces from the U.S. Securities and Exchange Commission (SEC).

This clarification comes in the wake of an ongoing legal battle. In April 2024, Tron requested that a New York federal court dismiss the SEC’s lawsuit against it, contending that the regulator’s reach should not extend to predominantly foreign activities. This lawsuit, initially filed in March 2023, accuses Sun, along with the Tron Foundation, the BitTorrent Foundation, and Rainberry, of orchestrating unregistered offerings, manipulative trading practices, and unlawful promotion of TRX as a crypto asset security.

The SEC has alleged that Sun engaged in manipulative “wash trading” to artificially inflate public interest in TRX and BitTorrent, leveraging endorsements from celebrities like Soulja Boy, Lindsay Lohan, Jake Paul, and Akon.

At the time of writing, Tron Network had not provided an official response to these developments.