Here are some of the major developments in the world of crypto over the past few days.
BitGo's Wrapped Bitcoin will observe a shift from purely U.S. custody to multi-jurisdictional and multi-institutional custody for improved security. On October 9, it was announced that locations of custodial underlying Bitcoins would now be diversified into Hong Kong and Singapore. This change would serve massively to reduce the risks, as it would distribute custody keys all around the globe on October 8, while still using the same multi-signature technology and cold storage.
The move, it explained, would make it the very first-ever platform working with diversified custody in a joint venture with BiT Global. He appreciated the role of Tron Network and that of its founder, Justin Sun, in the venture but explained further that Sun was not going to get control of the funds because of his role. This comes amid ongoing legal rows, one of them being the lawsuit by the U.S. SEC against Sun over manipulative trading and unlawful activities regarding Tron and BitTorrent.
The Tron deal reflects additional commitments by BitGo to transparency and security when going through this transition process seamlessly, providing geographical extensions to custody operations.
Hong Kong to Reinforce Digital Asset Regulation
Hong Kong is going to consider tightening control over digital assets within the next 18 months as part of a broader ambition to promote the city as a global hub for financial technology. Speaking at an annual summit by Foresight 2024, he outlined strategic plans in place for the town about tech talent, new infrastructure, and a holistic regulatory framework. He added that a strong system of exchange and some form of legislation on stablecoins would be essential, pegged to stable assets such as fiat currencies.
Tests in the sandbox have already been launched by the Hong Kong Monetary Authority with major participants such as Standard Chartered Bank and Animoca Brands. On the list is a subsidiary of JD Technology Group, Jingdong Coinlink Technology, which earlier announced that it would launch a 1:1 stablecoin pegged against the Hong Kong dollar but then added that participation in the Sandbox did not mean government backing or licensing.
This seems to be to the crypto-friendly thinking of Hong Kong—tending toward streamlining innovation while tightening the tongs of regulation simultaneously. In another event, CSOP Asset Management says it will list the first Bitcoin futures inverse product in Asia in Hong Kong, further fueling the status of the city as a digital asset space, according to reports.
BitGo CEO Brushes Off Concerns Over Justin Sun's Involvement in Wrapped Bitcoin Business
BitGo CEO Mike Belshe has brushed off concerns over Justin Sun's involvement in its Wrapped Bitcoin business. It comes amid recent changes whereby the custodial jurisdiction of the underlying Bitcoin gets changed from the U.S. to Singapore and Hong Kong. The joint venture sees an amalgamation of Hong Kong-based BiT Global, the Tron ecosystem, and Sun. However, Block Analitica Labs, a risk management firm, issued a warning regarding Sun's involvement, citing operational and transparency problems with his previous crypto projects.
BA Labs requested the closure of the new WBTC-opened debts in MakerDAO and to halt borrowing against WBTC collateral. He brushes off the concerns as mere reactions to Sun's name, reassuring that the security protocols of BitGo are still intact. Sun had a similar opinion, characterizing his position as strategic and stating that he lacks direct access to WBTC reserves. The proposal will be voted upon by the MakerDAO community on the 12th of August.