​Coinbase Custody publishes data on Grayscale reserves

What’s new? The custody service of the crypto exchange Coinbase published data on the reserves of digital asset management company Grayscale Investments. The firm previously refused to provide proof of reserves or wallet addresses to show the underlying assets of its cryptocurrency products, citing “security concerns.” According to Coinbase Custody, each product’s crypto assets at Grayscale have their own address on the network.

Coinbase Custody’s data

What else does the statement say? The share of bitcoins in the Grayscale Bitcoin Trust and Grayscale Digital Large Cap Fund is 635 235 and 6390 coins, respectively. The number of ETH in the Grayscale Ethereum Trust is 3 million tokens and in the Grayscale Digital Large Cap Fund is 40 611.

In addition to BTC and ETH, Grayscale owns assets such as SOL, ADA, AVAX, UNI, DOT, MANA, and LINK.

According to the statement, these cryptocurrencies are segregated, are in cold storage, and cannot be used by Coinbase Custody for loans and other operations.

Ryan Selkis, the founder of analytics company Messari, said that the use of trust assets by the custody service would be “would be fraud by Coinbase, Grayscale, and negligence by both companies auditors.”

Guys - I’ll say this one more time.All Grayscale trust assets are at Coinbase and untouchable. If they were touched, it would be fraud by Coinbase, Grayscale, and negligence by both companies auditors.The assets are there. It’s the rest of the trust structure that is broken. — Ryan Selkis 🥷 (@twobitidiot) November 21, 2022

According to Selkis, the main problem is the US Securities and Exchange Commission’s (SEC) stance on not approving Grayscale’s spot ETFs. He noted that the SEC has “utterly failed in its mandate to protect investors.”

On November 16, Genesis Global Capital, acting as a liquidity provider for Grayscale Investments’ Bitcoin Trust (GBTC), announced that it stopped withdrawing funds. The firm cited “extreme market dislocation” that led to a significant outflow of funds from its platform that exceeded current liquidity. Cryptocurrency exchange Gemini announced that its Earn program, whose lending partner is Genesis Global Capital, also suspended withdrawals. Genesis is part of the venture capital firm Digital Currency Group (DCG), which also owns Grayscale.