Prime

Bitcoin

when

Reserve

<h4><strong>In simple terms, proof of reserves is when a company shows that it holds enough assets to back up what customers have stored with them. </strong></h4> 
<p>Armstrong explained that Coinbase follows other methods to ensure its clients’ funds are safe. So, proof of reserves is not something they plan to do.</p> 
<h5><strong>What Armstrong Had to Say About Proof of Reserve</strong></h5> 
<p>Armstrong responded to concerns by saying, “Not sure what this is all about, to be honest.” He explained that all transactions related to <a href="https://www.altcoinbuzz.io/?s=etf" target="_blank" rel="noopener">ETFs</a> on Coinbase are processed on the blockchain, meaning they are transparent and visible.</p> 
<p>However, for institutional clients—big companies that trade large amounts of money—the situation is a bit different. They use special services like trade financing and <a href="https://www.ig.com/en/glossary-trading-terms/otc-definition" target="_blank" rel="noopener">over-the-counter (OTC) trading</a>, which aren’t always settled immediately on the blockchain. Still, Armstrong reassured everyone that these trades are eventually settled on-chain, usually within one business day.</p> 
<blockquote class="twitter-tweet"> 
 <p dir="ltr" lang="en">Baldilocks here.</p> 
 <p>Not sure what this is all about TBH. All ETF mints and burns we process are ultimately settled onchain. Institutional clients have trade financing and OTC options before trades are settled onchain. This is the norm for all our institutional clients. All funds…</p> 
 <p>— Brian Armstrong (@brian_armstrong) <a href="https://twitter.com/brian_armstrong/status/1835022703570702490?ref_src=twsrc%5Etfw">September 14, 2024</a></p>
</blockquote> 
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p> 
<p>In a nutshell, Coinbase is saying that institutional clients don’t always want their big trades to be public knowledge right away. “All funds are settled in our Prime vaults (on-chain) within about one business day,” Armstrong said, adding that this system works well for their clients.</p> 
<h5><strong>No Proof of Reserves, But There Are Audits</strong></h5> 
<p>Some people in the crypto world have called for Coinbase to provide proof of reserves, but Armstrong doesn’t think it’s necessary. He explained that Deloitte, a major accounting firm, audits Coinbase every year since it is a public company. “If you want audits, Deloitte audits us annually,” Armstrong said. Being a public company means Coinbase already follows strict rules to make sure everything is in order.</p> 
<p>Armstrong also pointed out that institutional clients—big companies and investors—probably don’t want all their wallet addresses out in the open. Sharing this information could put them at risk, and Armstrong doesn’t believe it’s Coinbase’s job to reveal these details.</p> 
<h5><strong>Trusting a Custodian</strong></h5> 
<p>Armstrong also touched on the issue of trust. For their Bitcoin product, <a href="https://www.altcoinbuzz.io/?s=cbBTC" target="_blank" rel="noopener">cbBTC</a>, Coinbase is a centralized custodian. This means that when people buy cbBTC, they are trusting Coinbase to store the actual Bitcoin. “We’ve never claimed otherwise,” Armstrong said, making it clear that customers know Coinbase holds the Bitcoin behind the scenes.</p> 
<p><a href="https://www.patreon.com/altcoinbuzz" target="_blank" rel="noopener"><img decoding="async" class="alignnone wp-image-123700 size-full entered lazyloaded" src="https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner.jpg" sizes="(max-width: 1197px) 100vw, 1197px" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner.jpg 1197w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-300x37.jpg 300w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-1024x127.jpg 1024w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-768x95.jpg 768w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-696x86.jpg 696w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-1068x132.jpg 1068w" alt="" width="1197" height="148" data-lazy-sizes="(max-width: 1197px) 100vw, 1197px" data-lazy-srcset="https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner.jpg 1197w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-300x37.jpg 300w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-1024x127.jpg 1024w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-768x95.jpg 768w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-696x86.jpg 696w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner-1068x132.jpg 1068w" data-lazy-src="https://www.altcoinbuzz.io/wp-content/uploads/2023/09/Alpha_website_leaderboard-banner.jpg" data-ll-status="loaded"></a></p> 
<div class="youtube-embed" data-video_id="YI3uWPQqgJw">
 <iframe title="Will These 3 Altcoins Kill Ethereum?" width="696" height="392" src="https://www.youtube.com/embed/YI3uWPQqgJw?feature=oembed&amp;enablejsapi=1" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
</div> 
<h6><strong>Disclaimer</strong></h6> 
<p>The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.</p> 
<p>The post <a href="https://www.altcoinbuzz.io/cryptocurrency-news/coinbase-ceo-says-no-to-proof-of-reserves/">Coinbase CEO Says No to Proof of Reserves</a> appeared first on <a href="https://www.altcoinbuzz.io">Altcoin Buzz</a>.</p>

Coinbase CEO Says No to Proof of Reserves

Altcoin Buzz

Other articles published on Sep 16, 2024

NEIRO Soars 1,100% Amid Binance Duplicate Listing Confusion

FTW rallies 112% following CoinGecko listing

Crypto exchange Kraken removes the Lightning Network feature for customers in Germany

PancakeSwap Launches AI-Powered Prediction Bot on Telegram

ZKsync Integrates Chainlink CCIP to Power Cross-Chain Token Transfers

Sky Protocol’s Recent Proposal Could Impact $200M Loans Backed by Wrapped Bitcoin: Report

Join our free newsletter for daily crypto updates!