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Grayscale Says No To Proof of Reserves

1 min read Original Link

In a recent Twitter thread pondering the need for transparency in the industry after the collapse of FTX, Grayscale attempted to calm its investors’ fears, assuring them that the regulations that apply to its various entities make an FTX-like scenario nearly impossible.

Grayscale assures that each of its products is duly registered as a separate entity with its own regulations. They explain that the laws and regulations governing each of its crypto trusts prevent underlying assets from being sold, loaned, or otherwise transferred.

In a subsequent tweet, Grayscale assures that its cryptocurrencies are held by the custody service provided by Coinbase, the only regulated and publicly traded cryptocurrency exchange in the United States.

But now comes the awkward question. What about proof of reserves? Grayscale declined to do such a thing, citing security reasons. They explain that Coinbase, as custodian, does perform periodic validations, but as such, they would not disclose addresses or any information considered confidential so as not to affect the nature of their products:

(By Felix Mollen)

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