This comes amid concerns from some investors that Coinbase may be engaging in less-than-transparent practices with its on-chain payments.
It has been suggested that Coinbase may have purchased Bitcoin IOUs (IOUs) rather than physical Bitcoin for ETF issuers,
The company was criticized for influencing the market price of its shares. In response to this, BlackRock asked for the following actions: After confirming that the required minimum balance was in the account,
Coinbase Custody will withdraw Bitcoin from a custodial account to a public blockchain address within 12 hours of receiving instructions from the client or its agent.
The move is intended to show IBIT investors that their Bitcoin holdings are being properly managed and that there are no undue delays when customers want to withdraw their funds.
This appears to address market concerns surrounding IBIT. Cryptocurrency analyst Tyler Durden recently reported that Coinbase is a private equity firm for BlackRock.
"We are buying Bitcoin IOUs (IOUs)" rather than physical Bitcoin, and "the transactions are done off-chain, leaving no records, and BlackRock is transferring Bitcoin from Coinbase to Bitcoin," the company said.
"This would allow market manipulation, such as borrowing coins and selling them short," he said. But Joe Carrasalle, a commercial litigation lawyer, said he doubts the feasibility of the scheme Darden has alleged.
"The ETF's structure requires the involvement of Coinbase, BlackRock, an auditor, two accounting firms, and at least four law firms," the report said.
Custody refers to holding and managing assets on behalf of investors. It is a term that is widely used for assets other than cryptocurrencies, and includes safekeeping of assets, settlement of transactions, and receipt of former interest and dividends.
This refers to a service that handles a wide range of tasks on your behalf, such as proxy collection and voting. A company that acts as a custodian is called a "custodian."
Coinbase CEO Brian Armstrong also denied Darden's allegations.
"All ETF issuances and burns handled by Coinbase are ultimately settled on-chain," the company said.
Additionally, Coinbase has signed non-disclosure agreements with institutional investors.
Therefore, we are refraining from publishing their ETF wallet addresses, as we are not in a position to do so on their behalf.
In addition, we undergo an annual audit by Deloitte, the world's largest accounting firm, to ensure that our operations are properly managed.
The rumor also spread because while there has been new inflow into the Bitcoin ETF over the past three months, the price of Bitcoin has been stagnant.
This has sparked speculation that the company is not purchasing as much physical Bitcoin as the ETF, thereby suppressing the price of Bitcoin.
Bloomberg ETF analyst Eric Balchunas also denied the rumors, commenting:
It's understandable why people want to scapegoat ETFs, as native HODLers are likely selling their bitcoins.
But in reality, they are the sellers. ETFs and BlackRock have rescued the price of Bitcoin from the bottom many times.
2024/09/25 10:58 KST
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