Home » Despite rumours, Grayscale refuses to release its portfolio addresses

Despite rumours, Grayscale refuses to release its portfolio addresses

by Christian

Mistrust is the word of the moment, following the collapse of FTX. And it’s the giant Grayscale that seems to be paying the price at the moment. While rumours are circulating about the strength of its services, the company has refused to disclose its portfolio addresses. A decision that doesn’t please the community

Why is Grayscale’s GBTC struggling at the moment?

To understand what’s going on, we need to go back to the suspicions that Grayscale is facing at the moment. As a reminder, the Grayscale Bitcoin Trust (GBTC) is the largest cryptocurrency investment vehicle for institutional players. The company holds 634,000 BTC, or $10.2 billion at the current price.

The risk is therefore a particularly catastrophic contagion if Grayscale’s services were to collapse. The latter are currently accused of being more fragile than previously thought.

Ryan Selkis, the founder of analytics firm Messari, said a few days ago that the debts of Digital Currency Group, which issues GBTCs, were greater than its cash flow. However, this tweet has since been deleted:

So much so that Grayscale has issued a statement to allay investors’ fears

Grayscale won’t release portfolio addresses

The company detailed in a Twitter feed elements to show the strength of its services. It reminds us that the laws, regulations and documents surrounding the GBTC prevent it from being “loaned, borrowed or otherwise committed”. Furthermore, the company points out that the digital assets used for its investment products are held by Coinbase Custody.

Grayscale therefore firmly asserts that all BTC underlying its GBTC are held solely within this framework:

However, the company refuses to publish the addresses of the portfolios containing the funds in question. Grayscale explains:

“For security reasons, we do not make such on-chain information public […] whether through cryptographic reserve proof or other advanced cryptographic accounting procedures. “

The crypto community was of course not thrilled with the refusal, with some accusing Grayscale of having something to hide. The company anticipated this criticism, however, and responded in the same Twitter thread:

“We know this particular point will disappoint some, but the panic triggered by other entities is not a good enough reason to change complex security arrangements that have kept our investors’ assets safe for years. “

So, a legitimate security concern, or a way to avoid scrutiny? In the community, the debate is still raging. And it just goes to show that trust in major cryptocurrency-related companies has been completely upended since the FTX affair.

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