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Mike Belshe, CEO of digital asset management firm BitGo, has confirmed that Alameda Research attempted to cash out 3,000 wrapped Bitcoins (wBTC) days before FTX filed for bankruptcy on Nov. 11.
In the Twitter space on December 14th hosted According to Decentralized Finance (DeFi) researcher Chris Blec, Belshe suspected that an unknown Alameda representative involved failed Bitgo’s security verification process and how the wrapped Bitcoin burning process works. I have confirmed that the company denied the reimbursement request because it did not know much about it.
Full combo here. This part starts at 1:09:30. https://t.co/0KQg6bzd8k
Chris Blec (@ChrisBlec) December 14, 2022
“[The security details] The processes did not match. So we held it up and said no, no, no, no. This is nothing that looks like a burn. And we need to know who this person was.
“So we put it on hold and while we were on hold, we waited for a response to those issues. [Alameda] We went bankrupt and, of course, bankruptcy stopped everything, added Berchet.
Bitgo’s CEO also said Alameda’s 3,000 BTC mint request It remained “stuck” in the platform’s dashboard, adding that the company will likely keep the tokens where they are until the trustees responsible for Alameda’s bankruptcy proceedings handle it.
Alameda trial The unwrapping of 3,000 wBTC was also confirmed by Ethereum transaction aggregator Etherscan.
This would normally trigger a BTC redemption, but Bitgo had security mechanisms in place before the conversion took place, which Alameda failed to do.
It is not understood what the motives were for redeeming $50 million worth of wBTC, but it is not clear that FTX executives were raising money from various sources to try to stave off bankruptcy until the very end. understood.
According to an Arkham Intelligence analysis on November 25, Alameda $204 million from 8 different addresses on FTX.US Five days before the parent company finally applies for Chapter 11.
Related: Alameda had an ‘unfair’ trading advantage, special access to FTX funds: CFTC filings
wBTC is a tokenized version of BTC, It can be redeemed for BTC when sent to a burn address, triggering the release of BTC. Conversion is done in a 1:1 ratio.
Tokenization of wrapped Bitcoin allows Bitcoin holders to interact with Ethereum-based smart contracts and decentralized applications.
Bitgo co-developed wBTC in 2019 Along with blockchain interoperability protocol Ren and multi-chain liquidity platform Kyber. wBTC is also governed by the wBTC DAO, a decentralized autonomous organization with over 30 members.
The wBTC dashboard currently shows BitGo holding 202,255 BTC against 199,238 wBTC in circulation, reaching an overcollateralization rate of 101.51%.
