Coinbase CEO assures fully backed Bitcoin reserves, CZ deletes questionable tweet
Coinbase CEO Brian Armstrong allayed concerns about the state of the company’s Bitcoin holdings on Tuesday, following questionable suggestions from rival exchange owner Changpeng Zhao ( CZ ).
Binance’s CEO has since deleted his tweet, pledging to “work together to improve transparency in the industry.”
What did CZ say?
CZ’s now removed post drew attention to two separate claims about the exact number of Bitcoin held by Coinbase.
The first was one statement from Coinbase Custody CEO Aaron Schnarch on Monday, stating that the company was holding 635,000 BTC on behalf of the Grayscale Bitcoin Trust (GBTC). The other, however, was a 4-month-old headline about Coinbase’s exchange with less than 600,000 BTC.
“Just stating news reports, not making any claims,” CZ said. “Glassnode probably has more up-to-date data.”
Concerns surrounding both Grayscale and Coinbase began brewing over the weekend after the former denied to implement on-chain proof-of-reserves for its crypto holdings, along with a handful of others centralized companies.
The transparency measure is intended to assure creditors that their deposits are fully supported, and not secretly being mismanaged as it is. suspect of the now closed stock exchange FTX.
Still, Twitter’s crypto community deemed his suggestive tweet both ignorant and uncalled for. For example, Messari founder Ryan Selkis pointed out that Coinbase already had audited financials proving that it contained approximately 2 million Bitcoins.
Binance’s CEO eventually removed the tweet after receives a DM from Brian Armstrong describing the same economies.
“If you see FUD out there – remember that our finances are public (we are a public company),” clarified Armstrong in a follow-up tweet. Documents provided by the CEO showed that his company had approximately $39.9 billion in Bitcoin by the end of the third quarter of 2022.
Contrasting coin base with FTX
CZ’s statement comes 16 days after the publication of tweets that arguably sparked the bank run on FTX, leading to its swift demise. Some interpreted Monday’s tweet as a deliberate attempt to take down another competitor, although CZ denied such intentions.
During the week that FTX collapsed, Brian Armstrong explained that Coinbase’s public audit and 1:1 backing of customer funds would prevent it from possibly going under like FTX. He said Coinbase had no exposure to FTX, FTT or its sister company Alameda Research at the time.
Days before the bankruptcy, former FTX CEO Sam-Bankman-Fried claimed that FTX supported customer funds 1:1, and that they had strictly regulated GAAP audits. He has since deleted the tweets making these claims.
“If an exchange keeps users’ assets as is, no amount of other people’s tweets will cause problems. Simple,” so CZ last Thursday.
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