Alameda tried to redeem 3,000 wBTC days before bankruptcy: BitGo CEO

Mike Belshe, the CEO of integer plus custodian BitGo has confirmed that Alameda Research attempted to redeem 3,000 Wrapped Bitcoin (wBTC) successful the days earlier FTX’s bankruptcy filing connected Nov. 11. 

During a Dec. 14 Twitter Spaces hosted by decentralized concern (DeFi) researcher Chris Blec, Belshe confirmed the steadfast knocked backmost the redemption petition due to the fact that the chartless Alameda typical progressive didn’t walk Bitgo’s information verification process and seemed unfamiliar with however the wrapped-Bitcoin burning process worked.

Full convo here. This portion starts astatine 1:09:30. https://t.co/0KQg6bzd8k

— Chris Blec (@ChrisBlec) December 14, 2022

“[The information details] didn't lucifer the process. So we held it up and we said no, no, no, no. This is not what the pain looks like. And we request to cognize who this idiosyncratic was.”

“So we held it and portion we were holding it, waiting for a effect connected those issues [Alameda] went bankrupt and of course, erstwhile they went bankrupt, everything halted,” Belshe added.

The Bitgo CEO besides said that Alameda’s 3,000 BTC mint request remains “stuck” connected the platform’s dashboard and added that the steadfast would astir apt permission the tokens wherever they are until they’re dealt with by the trustees taking connected Alameda's bankruptcy case.

Alameda’s failed mint transaction petition of 3,000 wBTC successful speech for 3000 BTC. Source: wBTC Network Dashboard.

Alameda’s attempt to unwrap the 3,000 wBTC was besides confirmed connected the Ethereum transaction aggregator Etherscan.

However, portion this would person ordinarily triggered the redemption of BTC, Bitgo has a information mechanics acceptable successful spot earlier the conversion takes place, which is what Alameda failed.

It is not understood what the motive was for attempting to redeem the $50 cardinal worthy of wBTC, but it is understood that FTX executives were attempting to rise funds from a assortment of sources to stave disconnected bankruptcy up until the past minute.

Analysis from Arkham Intelligence connected Nov. 25 recovered that Alameda pulled $204 cardinal from 8 antithetic addresses from FTX US 5 days earlier the steadfast yet filed for Chapter 11.

Related: Alameda had ‘unfair’ trading advantage, peculiar entree to FTX funds: CFTC filing

wBTC is simply a tokenized mentation of BTC, which tin beryllium redeemed for BTC erstwhile it is sent to a pain code which triggers the merchandise of BTC. The conversion is made astatine a 1:1 ratio.

The tokenization of wrapped-Bitcoin enables Bitcoin holders to interact with Ethereum-based astute contracts and decentralized applications.

Bitgo co-developed wBTC successful 2019 alongside blockchain interoperability protocol Ren and multi-chain liquidity level Kyber. wBTC is besides managed by the decentralized autonomous enactment wBTC DAO, which comprises implicit 30 members.

The wBTC dashboard presently shows that BitGo present holds 202,255 BTC successful custody against 199,238 wBTC successful circulation, amounting to an overcollateralization complaint of 101.51%.