WBTC Delisting Suspension Recommended as Custody Risk Decreases

According to BlockBeats, on September 25, CoinDesk reported that the lending platform Sky (formerly MakerDAO) may be preparing to suspend its plan to divest WBTC. This decision stems from the latest advice of an influential consultant.

The move came after a lengthy discussion on the Sky discussion forum between the advisor and Mike Belshe, CEO of BitGo, which was the sole custodian of the Bitcoin backing WBTC until an agreement was reached in August with Tron founder Justin Sun to transfer custody.

Belshe has spoken extensively on the Sky forums recently, saying that the new hosting arrangement has been misunderstood and that Justin Sun will not be making changes to the structure alone.

“They will not ‘have the ability to direct changes to key management practices at BitGo or BitGo Singapore,’ the two entities responsible for overseeing the multi-signature keys that control the new custodian,” Belshe wrote on Sept. 20.

“The additional details and clarifications provide us with greater comfort regarding the current state of WBTC operations and key management,” BA Labs wrote on Tuesday.

The advisor noted that WBTC’s collateral risk has “reduced somewhat to the current total borrowing level of approximately $170 million,” reducing the risk to a “more acceptable range.”

“We believe the risks no longer warrant an immediate delisting of collateral. We therefore recommend that the delisting process be suspended indefinitely,” BA Labs wrote.

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