Wrapped Bitcoin’s custodian, BitGo, denied withdrawal attempts made by Alameda Research’s wallet address with a value in excess of $50 million at the time, according to its CEO on December 14th.
Wrapped Bitcoin (WBTC) is a token pegged to the price of Bitcoin and operates on the Ethereum network, and lets holders interact with various DeFi apps. Alameda Research was the sister trading firm of the now-bankrupt FTX exchange. Both were founded by Sam Bankman-Fried.
During a Twitter Spaces discussion, BitGo CEO Mike Belshe claimed that the security details used in Alameda’s withdrawal request “didn’t match the process.”
On November 9, two attempts to withdraw 3,000 WBTC tokens were made, according to Etherscan data. Alameda Research addresses were also used in the attempts.
The CEO explained that while his company was waiting for a response to these security issues, Alameda declared itself insolvent, and “everything came to a halt.”
Making withdrawals and exchanging WBTC for actual Bitcoin means that the WBTC exchanged is destroyed, or in crypto terms, “burned.” Conversely, when Bitcoin is deposited, BitGo or affiliate custodians mint new WBTC.
(Reporting by Shikha Singh, Editing by Kapil Rajyaguru)
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