- BlackRock's Support for cbBTC Project
- Coinbase Defends cbBTC Transparency
- Debate on Proof-of-Reserve Intensifies
Coinbase has come under scrutiny regarding the transparency of its newly introduced wrapped Bitcoin product, cbBTC. BlackRock’s role in the cbBTC project has been cited as a confidence-building factor.
BlackRock's Support for cbBTC Project
As noted by Bloomberg senior ETF analyst Eric Balchunas, BlackRock’s involvement means that Coinbase will manage Bitcoin assets properly. He stated that mismanagement might result in the violation of the Securities Act of 1933, posing a threat to the exchange.
Coinbase Defends cbBTC Transparency
Coinbase CEO Brian Armstrong responded to criticism from Tron founder Justin Sun on the lack of proof of reserve for cbBTC. Armstrong pointed out that cbBTC is a centralized custodian product and all transactions are settled on-chain. He also noted that Coinbase is audited annually by Deloitte, which adds to the transparency.
Debate on Proof-of-Reserve Intensifies
The discourse on Proof-of-Reserve (PoR) has been reignited in 2022, particularly after the failures of Terra/LUNA and FTX. The crypto community considers PoR reports as crucial to regaining trust and ensuring proper financial management. While some large exchanges like Binance provide PoR reports regularly, Coinbase has not offered similar statements regarding cbBTC.
The discussion on the transparency of cbBTC and the need for Proof-of-Reserve continues. Despite Coinbase’s assurances of security and audit practices, the community remains concerned.
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