The rehypothication is the entire problem. There is zero guarantee that they are not rehypothicating. And gun to my head, if I had to guess if they're doing it, I'd say yes. Greed is powerful. Don't forget we are talking about the crypto market here where greed is leveraged.

wBTC was created so shitcoiners can maintain BTC price exposure and hold tokens on the issuing shitcoin protocol without having to go through the process of unwinding to Bitcoin which runs on a separate protocol. It is commonly used in layer 2 shitcoin "decentralized" exchanges . Many of the penny stock type shitcoins only trade on these dex's so this allows shitcoiners to have a "cash balance" on that shitcoin protocol for immediate trading.