# Why Ketju rejected Function FBTC

- URL: https://riadefi.com/rejections/function-fbtc/
- Exposure: other
- Memo version: v1
- Reviewed: 2026-08-17
- Next review: 2026-11-17

## The memo

REJECTED. FBTC (Function Network's Bitcoin-backed omnichain asset, unrelated to Fidelity's spot Bitcoin ETF that trades under the same ticker) follows the same custodial structure as WBTC and BTCB, both already rejected in this registry: BTC held by named custodians, minted 1:1 by KYB-gated Merchants, with retail exit only through secondary markets. A three-member Security Council of Mantle, Antalpha Prime, and Cobo oversees custody through threshold-signature and MPC techniques, which is a more explicit role separation than WBTC discloses, but this review could not confirm the exact approval threshold among the three parties, and no independent, third-party proof-of-reserves attestation was found. Absence of a named scandal does not offset an unconfirmed custody threshold and no independent reserve verification — this is a standing disclosure gap, not a temporary evidence gap.

## What would reopen the file

- An independent, third-party proof-of-reserves attestation for FBTC is published on a recurring basis
- The exact Security Council or TSS approval threshold is publicly confirmed and shown to require genuine multi-party consensus with no single-party override path
- A permissionless or clearly disclosed, non-discriminatory redemption path is demonstrated for non-institutional holders
- Twelve consecutive months with no custody, freeze, or minting-irregularity incident following threshold confirmation

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Published by Ketju Research (https://ketjuresearch.com). Educational analysis only; not legal, tax, compliance, or investment advice.
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