Grayscale Will Not Disclose Evidence of Reserve Holdings, Citing ‘Security Concerns’

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Last Updated on November 20, 2022 by Bitfinsider

After bitcoin and ether products reach new all-time lows, crypto investment firm Grayscale will not provide proof of reserves.

“Due to security considerations, we do not make such on-chain wallet information and confirmation information publicly available via a cryptographic Proof-of-Reserve or other advanced cryptographic accounting technique,” Grayscale wrote on Twitter on Friday afternoon.

The company admitted that its decision to keep reserve information confidential would “disappoint” certain investors. In light of the crypto exchange FTX’s bankruptcy filing earlier this month, crypto businesses are under pressure to provide more information about their reserves.

“However, panic caused by others is not a sufficient excuse to disregard the extensive security mechanisms that have kept our investors’ assets safe for years,” Grayscale stated.

Grayscale Bitcoin Trust (GBTC) and its ETHE product both reached record lows on Thursday. Digital Currency Group, the firm’s parent business, has dismissed fears of contagion following the dramatic collapse of FTX. Simultaneously, though, another Grayscale-affiliated firm has lately ceased withdrawals. Grayscale is connected to Genesis Global Capital via Digital Currency Group.

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