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Analyst confirms GBTC’s 633K bitcoin claim despite Grayscale’s reluctance to share evidence of reserves

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An independent analyst has confirmed that GBTC holds approximately 633,000 bitcoin held by its custodian – Coinbase Custody. It comes as Grayscale, the asset manager that manages the world’s largest bitcoin fund, revealed it will not share evidence of its reserves with clients.

According to the analyst, there could be two reasons for Grayscale’s reticence. One could be a confidentiality policy implemented by Coinbase Custody, or it could be a deliberate confusion by Grayscale.

verification of proof of storage in greyscale

An OXT Research analyst, known by the pseudonym Ergo, has Confirmed The existence of Grayscale’s on-chain holdings using on-chain forensics.

In total, they were able to identify 432 Coinbase Custody addresses as potential GBTC TXOs with a total balance of approximately 317,705 BTC. This figure is approximately 50% of GBTC’s reported current positions.

The credibility of centralized crypto exchanges to serve as custodians of clients’ assets has been questioned many times. But it wasn’t until FTX’s spectacular collapse to bankruptcy that discussion of one possibility was revived: Proof of Reserves.

Proof of Reserve (POR) is essentially an independent audit conducted by a third party to provide clarity and evidence that a custodian is holding the assets it claims to own on behalf of its clients. The balances are aggregated by these auditors into a Merkle tree, which contains all customer balances.

Many companies are now rushing to publish Proof of Reserves in an effort to reassure customers that their funds are safe.

Binance, the world’s largest cryptocurrency exchange by volume, has already published information about its wallet balances and revealed its plans to conduct proof-of-reserve snapshots in the coming weeks. Gate.io, KuCoin, Poloniex, Bitget, Kraken, Huobi, OKX, Deribit, and Bybit are some of the other major exchanges that have made similar commitments.

Also read  Binance leads PoR effort, Bitcoin battles above $16K and crypto market attempts recovery: This week's recap

but not shades of gray

The asset manager that manages the world’s largest bitcoin fund firmly said last week that it has no plans to follow in the footsteps of other custodians, citing security concerns.

In a statement last week, Grayscale wrote that it understood that not disclosing the repository would be “a disappointment for some,” but added that “the panic spread by others is reason enough to evade complex security arrangements.” Failed to “keep its investors’ wealth safe” for many years.

“For security reasons, we do not make such on-chain wallet information and confirmation data publicly available through cryptographic proof of reservation or other sophisticated cryptographic accounting procedures.”

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source: cryptopotato.com

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