The popular crypto investment firm Grayscale confirmed that it will not show its on-chain crypto assets reserves amid this critical situation because of privacy concerns.
Grayscale Investments is a popular company that manages digital assets investment funds. This firm is a subsidiary of the Digital Currency Group, which also owns Coindesk, a popular cryptocurrency news, and digital media company. This firm was established in 2013. This firm allowed investment in Cryptocurrencies via its trusts, or say its corresponding Digital assets.
On 19 November, Grayscale took to Twitter to share its decision that it will not give on-chain proofs of its actual reserves fund behind its digital assets.
Grayscale stated that the majority of the crypto Investors are asking for the reserves fund that crypto companies are holding against the user’s investment because of the ongoing downfall in the crypto sector like FTX bankruptcy.
Crypto investment firm explained that each of its digital asset products remains under the full observation of separate legal entities. In short, all of its digital assets are under a fully compliance-based system.
The company also confirmed that no rules or laws allow Grayscale to mismanage the funds or take loans on behalf of digital assets.
The further company explained that the digital assets of this company are under the custody of the crypto custody solution of the Nasdaq-listed public Coinbase crypto exchange.
Grayscale also explained that Coinbase’s crypto custody service tracks the on-chain holdings in real-time. But here company is not interested to share any proof of reserves because of privacy & security reasons.
It is worth noting that majority of the crypto exchanges including Binance, Coinbase are working to develop an open-source code to share the user’s fund reserves, which was initially proposed by Ethereum co-founder Vitalik Buterin.