Grayscale Investments said that it is not willing to make any of its wallet addresses public due to security concerns.
“Due to security concerns, we do not make such on-chain wallet information publicly available through a cryptographic Proof-of-Reserve”, said Grayscale.
Proof-of-Reserves is one of those initiatives that can bring the trust back to centralized players
are sharing their Proof-of-Reserves reports with their customers to gain their trust back after FTX’s sudden collapse.
But there is a dark horse amidst this market trend that does not agree with this reasoning.
Grayscale Investments, the world’s leading digital asset manager, while making a statement on the security of its holdings said that it is not willing to make any of its wallets addresses public due to security concerns.
Why Grayscale is Against Proof-of-Reserves?
Grayscale shared a thread of tweets on 19th November, clarifying its stance on stakeholders’ concerns after the market crash. In this series of tweets, Grayscale shared that each of its holdings is a separate legal entity and it cannot be lent or borrowed as per its defining laws.
Grayscale also shared that all of its digital funds are stored in the security of Coinbase Custody Trust Company and all of its BTC holdings are held by Grayscale only. However, the asset management firm refused to share their Proof-of-Reserves citing their concerns with sharing their wallet addresses publicly. Giving their reasons, Grayscale said,
“... 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.”
This statement from Grayscale has made headlines because it is against the present market trend. However, Grayscale might wants to take its time before releasing any information about its current holding.
How it Will Affect the Crypto Industry?
This decision of Grayscale is blatantly against the norms of the crypto industry. Most of the centralized exchanges are sharing their wallet addresses to gain the trust of their customers and this decision of a key industry player is going to make them think twice before sharing this information publicly.
Proof-of-Reserves is one of those initiatives that can bring the trust back to centralized players, however, it is always wiser to have complete custody of their cryptocurrencies.
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