Grayscale cites security concerns for withholding on-chain proof of reserves

Grayscale cites security concerns for withholding on-chain proof of reserves


Cryptocurrency investment product provider Grayscale Investments has refused to provide on-chain proof of reserves or wallet addresses to show the underlying assets of its digital currency products citing “security concerns.”

In a Nov. 18 Twitter thread addressing investor concerns, Grayscale laid out information regarding the security and storage of its crypto holdings and said all crypto underlying its investment products are stored with Coinbase’s custody service, stopping short of revealing the wallet addresses.

6) Coinbase frequently performs on-chain validation. Due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure.

— Grayscale (@Grayscale) November 18, 2022

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“We know the preceding point in particular will be a disappointment to some,” Grayscale added, “but panic

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