Investment company Grayscale said that its crypto assets are stored on the wallet of the regulated crypto exchange Coinbase and, for security reasons, the fund will not publicly inform about its assets.
Because Coinbase is audited periodically as a custodial service, the Grayscale team will not disclose addresses or any information considered confidential:
“Coinbase often performs blockchain validation. For security reasons, we do not give information about the wallet, reserves or other advanced cryptographic accounting procedure.”
Grayscale understands the backlash their reluctance to follow the example of crypto exchanges and report on reserves will cause:
“Our announcement will be disappointing to many, but the panic caused by the fiasco of FTX and others is not a good reason to bypass the complex security measures that have protected our investors’ assets for years.”
Representatives of Grayscale tried to reassure investors, assuring that the rules applicable to its divisions make a scenario like the collapse of FTX almost impossible. The company ensures that each division registers its product in accordance with the law. That is, the rules governing their crypto trusts prohibit the sale, loan, or other transfer of users’ underlying assets.
Recently, the CEO of the Binance exchange stated that disclosure and factual confirmation of the existence of assets or reserves should be mandatory for companies in the crypto industry. He was supported by many exchanges, some even did it to the detriment of their reputation.
Source: Bits
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