In a Twitter post dated December 14, BitGo CEO Mike Belshe stated that the company had turned down a request from Alameda Research to redeem 3,000 Wrapped Bitcoin (WBTC) just a few days before the latter filed for bankruptcy.
According to Belshe, the request was turned down by BitGo because the Alameda person who contacted the company did not pass the firm’s security verification process.
He went on to say that BitGo is acquainted with the representatives of all of the companies that held WBTC, but that the custodian has never worked with the Alameda representative previously.
Additionally, the individual lacked knowledge of the burn addresses, which are locations where the WBTC was delivered prior to the release of the BTC that was used to back it.
As a result of these factors, BitGo put a halt to the procedure in order to inquire further about the trading company. “While we were holding it, waiting for a response on those issues, they [Alameda] went bankrupt,” he added. “We were keeping it because we were waiting for an answer on those issues.”
According to the data (1) provided by Onchain, the redemption was started on November 9, two days before FTX announced that it was filing for bankruptcy, and the transaction is still in the pending state.
Despite the fact that Alameda has already transferred 3,000 WBTC to the burn address, BitGo has not yet given its approval for the redemption request that would cause the release to take place.
This indicates that BitGo presently possesses a greater quantity of BTC than the total amount of WBTC that is circulating. According to the dashboard (2), there are 199,238 WBTC in custody, which compares to a total of 202,255 BTC.
Although Belshe revealed the material in order to promote BitGo’s security, it also demonstrates the desperate attempts by individuals at FTX and Alameda to regain liquidity in the exchange’s closing days.