Coinbase Denies Allegations of Granting Special Privileges to BlackRock for Bitcoin Borrowing

user avatar

by Giorgi Kostiuk

2 years ago

Made with AI

  1. Allegations and Coinbase's Response
  2. Criticism and Defense of cbBTC
  3. Collaboration and Transparency Demands


    4. The world’s second-largest crypto exchange, Coinbase, has denied allegations that it granted BlackRock, the world’s largest asset manager, special privileges to borrow Bitcoin.

    Allegations and Coinbase's Response

    These claims arose when analyst Tyler Durden suggested that Coinbase was issuing Bitcoin IOUs (essentially loans) to BlackRock, allowing it to borrow Bitcoin without maintaining proper 1:1 backing with its ETF, potentially manipulating the market. In response, Coinbase clarified that it has never provided any preferential treatment to BlackRock. CEO Brian Armstrong emphasized that Deloitte regularly audits the company and that it must obey strict regulatory guidelines. He also stated that Coinbase cannot reveal institutional customers’ Bitcoin holdings unless required by law.

    Criticism and Defense of cbBTC

    The controversy deepened with the introduction of cbBTC, a wrapped Bitcoin asset launched by Coinbase on its Base network. Justin Sun, the founder of Tron, criticized cbBTC for its lack of transparency, claiming that it operates like a centralized asset that could be frozen or confiscated. Further, Sun argued that such assets run counter to the decentralized principles of Bitcoin. Despite these criticisms, Coinbase defended its practices and stated that it remains committed to transparency and compliance. However, the debate over centralizedness in the cryptocurrency world continues, as cbBTC’s launch has sparked concerns about transparency in the market.

    Collaboration and Transparency Demands

    Coinbase collaborated with BlackRock earlier in August, where it enabled BlackRock’s institutional clients to access crypto via its Prime service. Some community members continue to call for Coinbase to reveal its Bitcoin reserves to dispel any doubts regarding its wrapped Bitcoin product.

    Thus, Coinbase firmly denies any preferential treatment for BlackRock and continues to adhere to principles of transparency and regulatory compliance.

Tier I

Sector: #18291

Sealed Hiding Place Room

Resource Cache

Resource Cache

Tier I

Requires 25% Tier Progress to Claim
Meme Cache

Meme Cache

Tier I

Requires 50% Tier Progress to Claim
Equipment Cache

Equipment Cache

Tier I

Requires 75% Tier Progress to Claim

After collecting, hiding places will be stored in your inventory and can be opened with Keys.

Other news

Arca Desktop App Now Open to Public for AI Session Monetization

The Arca desktop app has launched to the public, allowing users to monetize their AI session data.

user avatarJacob Williams

Exodus Reports Third-Quarter Revenue Growth Amid Net Loss

Exodus reported a 7% revenue increase in Q3, reaching $325 million, but faced a net loss of $83 million, highlighting rising operational costs.

user avatarZainab Kamara

eToro Reports Decline in Third-Quarter Net Income Amid Growing Funded Accounts

eToro reports a significant decline in third-quarter net income to approximately $15 million, down from $57 million last year, despite an 18% growth in funded accounts.

user avatarSon Min-ho

Bitdeer Achieves Record Revenue but Faces Major Losses

Bitdeer reported record revenue of $320.7 million for Q3 2023, an 89% increase year-over-year, but faced a net loss of $125.5 million.

user avatarAyman Ben Youssef

Bitcoin May Benefit from Greater Regulatory Clarity

Bitcoin may benefit from a more predictable US regulatory environment as the SEC shows interest in blockchain-based financial infrastructure.

user avatarKofi Adjeman

SEC Reports Significant Decline in Enforcement Actions

The US Securities and Exchange Commission (SEC) has reported a significant decline in enforcement actions, marking the lowest level since 1991, under the Trump administration.

user avatarTando Nkube

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.