Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with WBTC.
No securities regulatory authority has expressed an opinion about WBTC, including an opinion that WBTC itself is not a security and/or derivative.
Token Description & Project Background
Wrapped Bitcoin is a popular Ethereum wrapped Bitcoin product which facilitates the introduction of Bitcoin into DeFi. The ratio between the value of BTC and WBTC is maintained at 1:1.
Wrapped Bitcoin was developed by BitGO in 2018, and launched in early 2019. BitGO is the centralized custodian of all BTC that substantiate each wBTC. The project is governed by a DAO called the wBTC DAO which consists of many of the leading players in the DeFi space.
Risks of WBTC
Like an investment in other crypto assets, there are some general risks to investing in wBTC. These include: (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to thestatement.
In addition to these general risks, an investment in wBTC is subject to the following specific risks:
- Any potential success associated with wBTC depends on the continued reliability of the token’s minting and burning process by BitGo, as well as BTC’s rate of adoption. The process relies on smart contracts and therefore the risk of hacks is present as well as the token here is still a possibility of the wBTC token temporarily deviating from its peg in times of significant volatility or disruptions to the custody provider’s financial stability.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with wBTC. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.
The wBTC community, wBTC DAO, and BitGo are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of wBTC have no recourse to the wBTC community, wBTC DAO, BitGo, or Uphold if wBTC declines in value for any reason.
Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.
Uphold’s Evaluation Process
Prior to listing wBTC on the Uphold Platform, Uphold performed due diligence on wBTC and determined that wBTC is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following:
- The creation, governance, usage, and design of wBTC, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community.
- The supply, demand, maturity, utility, and liquidity of wBTC.
- Any marketing materials put forward by the wBTC social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with wBTC, including any code defects, security breaches and other threats concerning wBTC and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
- Legal and regulatory risks associated with wBTC, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of wBTC.
Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
Uphold users should read thestatement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.
Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following. Please also review the for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and statement.
Last updated on June 21, 2023.
How to buy Wrapped Bitcoin (WBTC)
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