Coinbase's Brian Armstrong defended the firm against allegations of 'paper BTC' sale to BlackRock and lack of backing for its cbBTC product.
The community claims spiked after the world’s largest crypto custody firm launched its wrapped BTC, cbBTC. This BTC derivative is useful as collateral in the DeFi space.“If you want audits, Deloitte audits us annually; we’re a public company. I doubt our institutional clients want people dusting all their addresses, and it’s not our place to share for them.”the May allegations. They noted that the lack of transparency was due to a lack of ‘in-kind’ redemptions in the ETF design.
“As for cbBTC yes you’re trusting a centralized custodian to store the underlying BTC – we’ve never claimed otherwise.” Some community members felt that even if the firm is a centralized custodian, it should allow people to verify their BTC backing for cbBTC. Transparency is part of the blockchain ethos. However, Armstrong’s statement on cbBTC was deemed less satisfactory. One of the market watchers
“They 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. If they print too much paper BTC they will go the FTX route.”Benjamin is a Telecommunication Engineering graduate who is passionate about crypto-markets and unraveling market trends. Armed with charts and patterns, he's interested in making the intricate, complex landscape of digital assets more palatable for every user.
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