Coinbase founder and CEO Brian Armstrong has denied speculations that the company has sold paper Bitcoin to BlackRock without maintaining a 1:1 backing.<\/p>\n
The allegations have caused debate in the crypto community, with some accusing Coinbase of lacking transparency in its Bitcoin reserves.<\/p>\n
In a statement<\/a> on X addressing crypto analyst Tyler Durden, Armstrong explained that the minting and burning of Bitcoin for BlackRock\u2019s spot Bitcoin ETF are conducted transparently and on-chain.\u00a0Durden had shared data from Cryptoquant showing that Coinbase was the biggest buyer and seller at both market highs and lows.<\/p>\n Additionally, he implied that the exchange was letting BlackRock borrow BTC without providing collateral. And with BlackRock having one of the largest Bitcoin holdings in the world, the analyst suggested that the two firms could potentially be profiting off the cryptocurrency by controlling its dips and rises.<\/p>\n However, the Coinbase CEO has refuted the allegations. He referred to Durden\u2019s concerns as \u201cthe norm\u201d for institutional clients, emphasizing that Deloitte audits Coinbase annually, with the results publicly available for verification.<\/p>\n He also pointed out that the company cannot share its institutional clients\u2019 wallet addresses, citing privacy concerns. \u201cI doubt our institutional clients want people dusting all their addresses, and it\u2019s not our place to share for them,\u201d he stated.<\/p>\n Bloomberg analyst Eric Balchunas also weighed in on the controversy, denying the latest claims. He wrote on X:<\/p>\n \u201cI get why these theories exist and people want to scapegoat the ETFs. Because it is too unthinkable that the native HODLers could be the sellers. But they are.\u201d<\/p>\n He also added that ETFs such as that offered by BlackRock have helped stabilize bitcoin\u2019s price during periods of market volatility.<\/p>\n Armstrong was also forced to address issues concerning his company\u2019s wrapped Bitcoin product, cbBTC. He admitted that cbBTC is backed by a centralized custodian, which in this case is Coinbase itself.<\/p>\n However, Durden responded to Armstrong\u2019s assertion with an apparent quote from BTC\u2019s anonymous creator Satoshi Nakamoto that read, \u201cDon\u2019t trust, verify.\u201d<\/p>\n Another community member voiced <\/a>similar concerns, saying: \u201cThey will not provide any proof of reserves for the BTC they claim they have, nor any proof of backing for their new paper BTC called cbBTC.\u201d<\/p>\n Earlier, Tron (TRX) founder Justin Sun had lambasted<\/a> Coinbase\u2019s new offering, claiming it had no Proof of Reserve, lacked audits, and could allegedly freeze user funds.<\/p>\n The launch<\/a> of cbBTC has put Coinbase in direct competition with BitGo\u2019s Wrapped Bitcoin (WBTC), soon to be managed by Justin Sun\u2019s firm. As such, some observers have speculated that the recent accusations could be tied to a broader battle for market share between these two key players in the derivatives space.<\/p>\n The post Coinbase CEO Denies Selling \u2018Paper Bitcoin\u2019 to BlackRock and cbBTC Claims<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Coinbase founder and CEO Brian Armstrong has denied speculations that the company has sold paper Bitcoin to BlackRock without maintaining a 1:1 backing. The allegations have caused debate in the crypto community, with some accusing Coinbase of lacking transparency in its Bitcoin reserves. Brian Armstrong Dispels the Rumors In a statement on X addressing crypto […]<\/p>\n","protected":false},"author":0,"featured_media":7079,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7078","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/7078"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7078"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/7078\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/7079"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7078"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7078"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7078"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}cbBTC Controversy<\/h2>\n