Grayscale Says No To Proof Of Reserves For Security Concerns

After the collapse of crypto giant FTX, crypto exchanges are rushing to audit their reserves under the influence of CZ,  CEO of Binance, who first floated the idea of Proof-Of-Reserves. However, there’s one cryptocurrency investment firm that has refused to reveal its proof of reserves — and that’s Grayscale.

Grayscale’s Security Concerns

On Friday afternoon, Grayscale notified on Twitter that, due to security concerns, they do not make any on-chain wallet information or confirmation information publicly available; whether it’s through a cryptographic Proof-of-Reserve or other advanced cryptographic accounting procedure.

The firm admitted that some investors would be disappointed by its decision to keep its reserve information confidential. And that they were aware of the fact that, after FTX’s bankruptcy last week, crypto exchanges are currently pressured to provide more details about their reserves.

Read More: Crypto Exchanges Rush To Provide Proof-of-Reserves Following FTX Crisis

Grayscale further stated that,

“But panic sparked by others is not a good enough reason to circumvent complex security arrangements that have kept our investors’ assets safe for years”

On Thursday, Grayscale’s  Bitcoin Trust (GBTC) hit a record low, as did its ETHE product. The firm’s parent company, Digital Currency Group, is also feeling the heat due to having sizeable exposure to the now-bankrupt FTX exchange. Genesis, another entity affiliated with Grayscale recently halted customer withdrawals in wake of the FTX collapse.