{"id":512287,"date":"2022-11-19T04:41:13","date_gmt":"2022-11-19T01:41:13","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/grayscale-cites-security-concerns-for-withholding-on-chain-proof-of-reserves\/"},"modified":"2022-11-19T04:41:13","modified_gmt":"2022-11-19T01:41:13","slug":"grayscale-cites-security-concerns-for-withholding-on-chain-proof-of-reserves","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/grayscale-cites-security-concerns-for-withholding-on-chain-proof-of-reserves\/","title":{"rendered":"# Grayscale cites security concerns for withholding on-chain proof of reserves"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a26233ecd18a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a26233ecd18a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/grayscale-cites-security-concerns-for-withholding-on-chain-proof-of-reserves\/#%E2%80%9D_Grayscale_cites_security_concerns_for_withholding_on-chain_proof_of_reserves_%E2%80%9C\" >&#8221; Grayscale cites security concerns for withholding on-chain proof of reserves &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Grayscale_cites_security_concerns_for_withholding_on-chain_proof_of_reserves_%E2%80%9C\"><\/span>&#8221; Grayscale cites security concerns for withholding on-chain proof of reserves &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTEvYjY3Y2Q3ZjktOGVmYy00MDNiLThiNzAtMjU5MjEwNWI2ODJmLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-887bb764>Cryptocurrency investment product provider Grayscale Investments has refused to provide on-chain proof of reserves or wallet addresses to show the underlying assets of its digital currency products citing \u201csecurity concerns.\u201d<\/p>\n<p>In a Nov. 18 <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Grayscale\/status\/1593737708723118080\">thread<\/a> addressing investor concerns, Grayscale laid out information regarding the security and storage of its crypto holdings and said all crypto underlying its investment products are stored with Coinbase\u2019s custody service, stopping short of revealing the wallet addresses.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">6) Coinbase frequently performs on-chain validation. Due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure.<\/p>\n<p>\u2014 Grayscale (@Grayscale) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Grayscale\/status\/1593737746413244417?ref_src=twsrc%5Etfw\">November 18, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\u201cWe know the preceding point in particular will be a dis<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ointment to some,\u201d Grayscale added, \u201cbut panic 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<p>The move by Grayscale comes as pressure mounts on crypto business to introduce proof of reserves in the wake of FTX\u2019s liquidity issues and subsequent bankruptcy.<\/p>\n<p>Some Twitter users hit out at Grayscale\u2019s view that security concerns surrounded its decision to withhold its wallet addresses, with one <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/AsherHopp\/status\/1593745532404441088\">commenting<\/a> the addresses of Bitcoin (BTC) inventor Satoshi Nakamoto are well known and are of higher value to attackers, \u201cyet Satoshi&#8217;s Bitcoin remains secure.\u201d<\/p>\n<p>Grayscale shared a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Grayscale\/status\/1593737739442200578\">letter<\/a> co-signed by Coinbase CFO, Alesia Haas, and Coinbase Custody CEO, Aaron Schnarch, that broke down Grayscale\u2019s holdings by its investment products and reaffirmed the assets \u201care secure\u201d, that each product has its \u201cown on-chain addresses\u201d and the crypto always belongs \u201cto the applicable Grayscale product.\u201d<\/p>\n<p>Grayscale added that each of its products is set up as a separate legal entity and \u201claws, regulations, and documents [&#8230;] prohibit the digital assets underlying the products from being lent, borrowed, or otherwise encumbered.\u201d<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Nickel Digital, Metaplex and others continue to feel the impact of FTX collapse<\/em><\/strong><\/p>\n<p>Grayscale is known for its Grayscale Bitcoin Trust (GBTC), a security tracking the price of Bitcoin, it also has products tracking the price of other cryptocurrencies such as Ether (ETH) and Solana (SOL).<\/p>\n<p>Investor concerns come as Genesis Global, serving as the liquidity provider for GBTC announced on Nov. 16 that it had halted withdrawals citing \u201cunprecedented market turmoil\u201d resulting in significant withdrawals from its platform that exceeded its current liquidity. <\/p>\n<p>Genesis is a part of the crypto-focused venture capital company Digital Currency Group (DCG) which also owns Grayscale. GBTC is trading at a discount of nearly 43% compared to its net asset value in part due to investor speculation on GBTC\u2019s exposure to Genesis.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"crypto_biz\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/grayscale-cites-security-concerns-for-withholding-on-chain-proof-of-reserves\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Grayscale cites security concerns for withholding on-chain proof of reserves &#8220; Cryptocurrency investment product provider Grayscale Investments has refused to provide on-chain proof of reserves or wallet addresses to show the underlying assets of its digital currency products citing \u201csecurity concerns.\u201d In a Nov. 18 Twitter thread addressing investor concerns, Grayscale laid out information&#8230;<\/p>\n","protected":false},"author":1,"featured_media":512288,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTEvYjY3Y2Q3ZjktOGVmYy00MDNiLThiNzAtMjU5MjEwNWI2ODJmLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[79786,90192,82548,76550,107545,117],"class_list":["post-512287","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-digital-asset","tag-digital-currency-group","tag-gbtc","tag-grayscale","tag-liquidity","tag-business"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/512287","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=512287"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/512287\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/512288"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=512287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=512287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=512287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}