MakerDAO has approved a proposal to halt new borrowing against wrapped bitcoin (WBTC) due to concerns about BitGo.
The governance vote set the WBTC debt ceiling to zero DAI, meaning no new loans can be secured with WBTC collateral, and the loan-to-value (LTV) ratio for WBTC is now 0%.
Existing WBTC-backed loans remain unaffected, as the liquidation threshold stays the same.
This decision follows BitGo’s announcement of a partnership with BiT Global, linked to Tron founder Justin Sun, to manage WBTC custody. This shift moves custody from the U.S. to multiple jurisdictions, including Hong Kong and Singapore.
The move raised security concerns among MakerDAO contributors due to Sun’s controversial reputation and potential centralization of control.
BitGo CEO Mike Belshe defended the move, highlighting the firm’s commitment to security and legal oversight.
Image Credit: Pixabay
Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.
