grayscale, said it will not follow the trend and will not share proof of reserve due to security issues.
After the collapse of FTX, evidence of reserve began to be shared addressing the need for transparency in the industry. While Grayscale did not share proof of reserve, it tried to allay the fears of its investors and assured that the regulations that apply to its various entities make an FTX-like scenario nearly impossible.
Graycale Won’t Share Evidence of Reserves
grayscale, bitcoin(BTC) and Ethereum(ETH) will not share its assets as proof of reserve due to security concerns.
After crypto exchange FTX filed for bankruptcy protection earlier this month, crypto firms are being pressured to reveal more information about their reserves. “Due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic proof of reserve or other advanced cryptographic accounting procedure,” Grayscale said in a statement on Twitter.
[NEW TODAY] Due to recent events, investors are understandably inquiring deeper into their crypto investments. In this thread we’ve compiled additional information about the safety and security of the assets held by our digital asset products. https://t.co/MvTfUoK4o6 🧵
— Grayscale (@Grayscale) November 18, 2022
Grayscale assures that cryptocurrencies are held by the custody service provided by Coinbase, the only regulated and public cryptocurrency exchange in the United States. The firm also acknowledged that its decision to keep its reserve information confidential will be a “disappointment” for some investors.
