Sky, formerly known as MakerDAO, is considering removing Wrapped Bitcoin (WBTC) from its decentralized finance platform, SparkLend, due to concerns about its connections to TRON founder Justin Sun.

On September 12, the Sky team proposed a plan to phase out WBTC-A, WBTC-B, WBTC-C, and WBTC from SparkLend. This decentralized non-custodial liquidity protocol will begin the process on September 26.

The decision follows recent developments involving BitGo and its upcoming partnership with BitGlobal, which suggests that control of WBTC may shift to a joint venture associated with Sun.

“On the whole, we find that Sun’s involvement as a controlling interest in the new WBTC joint venture presents an unacceptable level of risk.”

Sky’s forum post advised users to close their WBTC Legacy Vaults and positions on SparkLend to avoid potential liquidation. The post cited increased counterparty risks linked to Sun’s influence, similar to issues observed with other projects associated with him, such as the TrueUSD stablecoin.

Concerns about WBTC rose after BA Labs highlighted potential risks related to Sun’s influence in an August 10 forum post. The post suggested that recent custody changes and historical issues with Sun-affiliated products warranted caution.

BitGo CEO Mike Belshe defended the security protocols in place, stating that the proposal to offload WBTC seemed more like a reaction to Justin Sun’s name rather than based on facts. However, he acknowledged that the BitGo team was also concerned about reactions to Sun’s involvement, which is why they disclosed his involvement upfront, even though he wouldn’t have the ability to arbitrarily move any funds.

Stay updated with the latest developments in the world of cryptocurrencies and finance by exploring more news on Global Crypto News.

Post Views: 3