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Grayscale refuses to share proof of reserves due to ‘security concerns’
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Grayscale refuses to share proof of reserves due to ‘security concerns’

Tony40Tony40 Member

Grayscale refuses to share proof of reserves due to ‘security concerns’ as shares trade at a 45% discount to bitcoin

Grayscale, the asset manager running the world’s largest bitcoin fund, said in a statement that it won’t share its proof of reserves with customers.

“Due to security concerns, we do not make such on-chain wallet information and confirmation data publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure,” said a statement on Friday.

Following the implosion of FTX and its subsequent bankruptcy ...

https://www.cnbc.com/2022/11/21/grayscale-wont-share-proof-of-reserves-due-to-security-concerns.html

Thanked by 1JasonM

Comments

  • Another one bites the dust...

  • Question is, who is concerned about his security....? ;)

  • These wanna be banks will all go insolvent in the end. I hope you don't hold your crypto with them for long time and are using cold wallets

  • Now, I know at least two companies involved in crypto, FTX and Grayscale, but still have no idea how crypto moneys are working, just how they get lost :blush:

  • jbilohjbiloh Administrator

    I actually just posted in your other thread, @Tony40 asking whether the Crypto winter will take down GBTC and/or Coinbase...

    It's never a good sign when they say "EVERYTHING IS FINE, WE PROMISE"

  • Now with this big news around FTX scam, people have started to pull their crypto out of these "wanna-be banks" and none of them has enough funds to cover everyone taking their crypto out.

    I think we'll see couple more going bankrupt/scam in near future.

  • FrankZFrankZ Member
    edited November 22
  • Any CEX is a scam including US stock market.

  • MaouniqueMaounique Member
    edited November 22

    @drizbo said: and none of them has enough funds to cover everyone taking their crypto out

    That is normal. The point of any bank savings is that you give up liquidity for gain. While it works most of the time to have both for as long as not everyone wants all of their money at the same time, that is not a given.
    A normal bank would collapse in the same situation, the difference is that it could be bailed out by the state by printing money. That happened in 2008 and, while the state made a profit reselling the assets after the crisis passed, the crisis only passed by printing money so we have some consequences lingering today still (inflation and shit).
    The world never recovered from the money-printing mania. The cryptos were both an answer to and a continuation of that process.

    It is sobering up time.

  • drizbodrizbo Member
    edited November 22

    @Maounique said:

    @drizbo said: and none of them has enough funds to cover everyone taking their crypto out

    That is normal. The point of any bank savings is that you give up liquidity for gain. While it works most of the time to have both for as long as not everyone wants all of their money at the same time, that is not a given.
    A normal bank would collapse in the same situation, the difference is that it could be bailed out by the state by printing money. That happened in 2008 and, while the state made a profit reselling the assets after the crisis passed, the crisis only passed by printing money so we have some consequences lingering today still (inflation and shit).
    The world never recovered from the money-printing mania. The cryptos were both an answer to and a continuation of that process.

    It is sobering up time.

    I was just reading on that a while ago, apparently its normal and allowed for (at least US) bank to lend forward 90% of your money. And that goes on indefinitely.

    But these crypto scam sites are not banks, they are supposed to be your "wallets". Theres no real regulation around them.

  • SteveMCSteveMC Member
    edited November 22

    @drizbo said: Theres no real regulation around them.

    Isn't the idea behind decentralization to be free from regulators ?

  • Its not decentralized if you keep your crypto in this "scam-bank". It would be if you keep it in your cold wallet.

    Now it's centralized in FTX and Coinbase etc.

  • edited November 22

    Don't you just write down your hash input on a piece of paper, what is with these wallet things?
    0100000000000000000000000000000000000000000000000000000000000000000000003BA3EDFD7A7B12B27AC72C3E67768F617FC81BC3888A51323A9FB8AA4B1E5E4A29AB5F49FFFF001D1DAC2B7C

  • MaouniqueMaounique Member
    edited November 22

    @drizbo said: But these crypto scam sites are not banks, they are supposed to be your "wallets".

    Nope, they are not.
    Your wallet is your wallet, your bank account is your bank account. You never confuse the two outside crypto, why would you with crypto? It's the same fucking thing.

  • @Maounique said:

    @drizbo said: But these crypto scam sites are not banks, they are supposed to be your "wallets".

    Nope, they are not.
    Your wallet is your wallet, your bank account is your bank account. You never confuse the two outside crypto, why would you with crypto? It's the same fucking thing.

    They are not registered as bank Mr. Angryboy. Paypal isn't a bank either, for your information.

  • @drizbo said: Paypal isn't a bank either, for your information.

    But it is not a wallet. I don't keep money with Pyapal, it is only a payment processor.

  • @johnnyquestion said:
    Don't you just write down your hash input on a piece of paper, what is with these wallet things?
    0100000000000000000000000000000000000000000000000000000000000000000000003BA3EDFD7A7B12B27AC72C3E67768F617FC81BC3888A51323A9FB8AA4B1E5E4A29AB5F49FFFF001D1DAC2B7C

    Link to guy searching landfill for three years looking for something like 10 million in bitcoin.

  • @Maounique said:

    @drizbo said: Paypal isn't a bank either, for your information.

    But it is not a wallet. I don't keep money with Pyapal, it is only a payment processor.

    Huh? You might not, but one can easily hold funds with PP.

    Didn't pp have to buy some tiny island offshore bank to get some bank privileges or something? Maybe I'm thinking of some other bank loophole scam.

  • Paypal has banking licence in EU due to Luxembourg (which is not an island).
    However, having a licence does not mean it is a bank, it is still a payment processor.

    You COULD hold money with your payment processor, not only Paypal, this does NOT mean Paypal is your bank account. They are really different things, for example, your bank account pays interest (in most cases) and that was the case with many crypto exchanges, they were offering "contracts" with ridiculous "interest" rates.

    That was NOT a wallet in any kind of a meaning of the term, it was the equivalent of an investment account, not even a bank account.

    Conclusion: Who stored fiat or crypto with these entities instead of their wallet was asking for trouble and can't complain now that it came to them. These are not wallets and not even the equivalent of a bank account, stricto senso, more like mutual fund or hedge fund investments, therefore loss is expected even without the scamming factor.

  • emgemg Member

    A close friend bought a bitcoin for $12 in the early days. He had it on a hard drive and it was eventually forgotten and tossed out when the hard drive failed. He wasn't even sure which hard drive it was on. Gone forever.

  • SteveMCSteveMC Member
    edited November 23

    Around 20% of currently minted Bitcoin—worth a small fortune—are gone forever, and can never be retrieved. Here's where they went. https://decrypt.co/37171/lost-bitcoin-3-7-million-bitcoin-are-probably-gone-forever

    -

    James Howells, 35, said he mistakenly put a hard drive with 7,500 bitcoins in the trash while clearing out his home in 2013. https://www.cnbc.com/2021/01/15/uk-man-makes-last-ditch-effort-to-recover-lost-bitcoin-hard-drive.html

  • A friend in Turkiye lost 300 of them (mined illegally at a netcafe as an employee, though).

  • Poor security. Someone else knew the credentials.

  • How surprising that all those things are happening at the same time ...

  • WebProjectWebProject Member, Host Rep

    Highly likely they do using customer funds so don’t want to share such information as it will be definitely security risk to their company!

    Thanked by 2Maounique SteveMC
  • @WebProject said:
    Highly likely they do using customer funds so don’t want to share such information as it will be definitely security risk to their company!

    The beauty of all this is there is a perfect audit trail

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