{"id":14623,"date":"2022-11-19T21:09:09","date_gmt":"2022-11-19T21:09:09","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/gbtc-manager-insists-the-holdings-of-grayscales-digital-asset-products-are-safe-and-secure-bitcoin-news\/"},"modified":"2022-11-19T21:09:09","modified_gmt":"2022-11-19T21:09:09","slug":"gbtc-manager-insists-the-holdings-of-grayscales-digital-asset-products-are-safe-and-secure-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/gbtc-manager-insists-the-holdings-of-grayscales-digital-asset-products-are-safe-and-secure-bitcoin-news\/","title":{"rendered":"GBTC Manager Insists the \u2018Holdings of Grayscale\u2019s Digital Asset Products Are Safe and Secure\u2019 \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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On Nov. 18, 2022, at 5:47 p.m. (ET), Grayscale Investments\u2019 official Twitter account shared information on the safety and security associated with Grayscale\u2019s digital asset products. The update from Grayscale follows the recent FTX collapse that has shaken crypto investors, and Digital Currency Group\u2019s (DCG) Genesis pausing the firm\u2019s lending unit in terms of withdrawals and new loan originations.<\/strong><\/p>\n

Grayscale Updates Public With Safety and Security Information \u2014 Custodian Says \u2018All Digital Assets That Underlie Grayscale\u2019s Digital Asset Products Are Held by Coinbase Custody\u2019<\/h2>\n

The FTX fallout has caused a ripple effect of fear in the crypto industry, which caused massive amounts of crypto withdrawals following the event. For instance, over $5 billion worth of bitcoin (BTC<\/a>) and ethereum (ETH<\/a>) was withdrawn<\/a> from exchanges between Nov. 7 to Nov. 14, 2022. The FTX collapse has also fueled<\/a> great interest in proof-of-reserves concepts,<\/a> as Binance<\/a>, Huobi<\/a>, Crypto.com<\/a>, and a slew of other crypto trading platforms have shared wallet addresses during the last two weeks. On Friday, Grayscale Investments tweeted<\/a> an update<\/a> \u201cabout the safety and security of the assets held by\u201d the firm\u2019s digital asset products.<\/p>\n

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On Nov. 18, 2022, Grayscale Investments shared safety and security information tied to the company\u2019s digital asset products.<\/figcaption><\/figure>\n

Grayscale\u2019s announcement follows the company Genesis pausing<\/a> the firm\u2019s lending unit as far as withdrawals and new loan originations are concerned. Grayscale, like Genesis, is a Digital Currency Group (DCG) subsidiary, and a lot of speculation has surrounded Genesis and its parent firm DCG since the withdrawal pause. The Wall Street Journal (WSJ) reported<\/a> on Nov. 17, 2022, that the WSJ newsdesk viewed a \u201cconfidential fundraising document\u201d that showed Genesis was reportedly soliciting investors for \u201can emergency loan of $1 billion.\u201d<\/p>\n

There\u2019s been a lot of criticism directed<\/a> at Grayscale and people talking about<\/a> how the Grayscale Bitcoin Trust (OTCMKTS: GBTC) is upside down in recent times. For instance, GBTC\u2019s premium or discount to NAV went from a premium to a discount in March 2022 and it has remained this way ever since. Just above Ark Investment Management, DCG is GBTC\u2019s largest holder in terms of shares owned. Grayscale manages<\/a> 643,572 bitcoin (BTC<\/a>), which equates to 3.065% of bitcoin\u2019s supply cap.<\/p>\n

\u201cEach of Grayscale\u2019s digital asset products is set up as a separate legal entity: an investment trust for single asset products, and limited liability company for diversified products,\u201d Grayscale shared<\/a> in an update on Friday. \u201cThe laws, regulations, and documents that define Grayscale\u2019s digital asset products prohibit the digital assets underlying the products from being lent, borrowed, or otherwise encumbered.\u201d Grayscale\u2019s Twitter thread continued:<\/p>\n

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All digital assets that underlie Grayscale\u2019s digital asset products are stored under the custody of Coinbase Custody Trust Company, LLC \u2014 To be perfectly clear: the [bitcoin] underlying Grayscale Bitcoin Trust are owned by [GBTC and GBTC] alone.<\/p>\n<\/blockquote>\n

Grayscale further added that Coinbase frequently confirms onchain validation, but the company has never publicly disclosed onchain addresses to the general public. \u201cDue to security concerns,\u201d Grayscale said. \u201cWe do not make such [onchain] wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure.\u201d<\/p>\n

The firm noted that it understands that not sharing proof-of-reserves may be \u201ca disappointment to some,\u201d but Grayscale further stressed, \u201cpanic sparked by others is not a good enough reason to circumvent complex security arrangements that have kept our investors\u2019 assets safe for years.\u201d<\/p>\n

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Ark Investment<\/a>, Coinbase<\/a>, coinbase custody<\/a>, custodian<\/a>, Digital Currency Group (DCG)<\/a>, GBTC<\/a>, GBTC Shares<\/a>, genesis<\/a>, Genesis Lending<\/a>, grayscale<\/a>, grayscale bitcoin trust<\/a>, Grayscale Investments<\/a>, Grayscale Investments update<\/a>, Grayscale products<\/a>, OTCMKTS: GBTC<\/a>, update Grayscale Investments<\/a>, Wall Street Journal<\/a><\/div>\n<\/div>\n

What do you think about Grayscale\u2019s recent update concerning the safety and security associated with the company\u2019s digital asset products? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

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