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Industry insiders and Coinbase CEO Brian Armstrong swiftly refuted rumors that Coinbase had issued Bitcoin IOUs.
Crypto analyst Tyler Durden, a well-known critic over the weekend accused Coinbase of allowing the company managing the largest spot bitcoin ETF, BlackRock, to borrow the cryptocurrency without posting any collateral.
Coinbase Armstrong Rejects “BlackRock IOU” Conspiracy Theory
Durden went on to say that would be an easy case of market manipulation and also lead to profits from price fluctuations. The accusations followed a post from Tron founder Justin Sun, in which he criticized Coinbase’s new wrapped bitcoin product, cbBTC, as lacking any Proof of Reserves or audits and being able to freeze balances at any time.
As per Sun:
“Any U.S. government subpoena could seize all your BTC. There’s no better representation of central bank Bitcoin than this. It’s a dark day for BTC.”
Against the accusations now, Coinbase CEO Brian Armstrong explained that the ETFs get minted, burned, and then settled on-chain within one business day. He further said that the institutional clients could use trade financing and over-the-counter options in advance of the trades getting fully settled. Following this explanation, Tyler Durden took down his tweet.
About this, the IOU crypto token is just like an IOU notice in that it signifies some indebtedness between two parties. For instance, if you happened to offer a friend Bitcoin and you want to track the transaction, then the friend issues an IOU token. This token shall remain in your wallet as proof of the debt.
Coinbase Conspiracy Debunked, Balchunas Supports BlackRock
Bloomberg ETF analyst James Seyffart called them baseless rumors and conspiracy theories. “More issuers – BlackRock for one – publish digital wallet addresses with the public at large for added transparency,” Seyffart said. Bitwise, a crypto-native spot bitcoin ETF issuer, has done this for both their Bitcoin and spot Ethereum funds, analysts note.
Bloomberg’s senior ETF analyst Eric Balchunas is incensed because the Bitcoin community blamed the recent market selling pressure on ETFs instead of “looking inward.”
He indicated that most Bitcoin investors are skeptical of government and big institutions, but BlackRock takes things seriously. According to him, the asset manager would not take it lightly in case of misconduct from Coinbase and its CEO Amrstrong regarding their Bitcoin.
Teuta
Teuta is a seasoned writer and editor with over 15 years of experience in macroeconomics, technology, and the cryptocurrency and blockchain industries. Starting her career in 2005 as a lifestyle writer for Cosmopolitan in Croatia, she expanded into covering business and economy for several esteemed publications like Forbes and Bloomberg. Influenced by figures like Don Tapscott and Bruce Dickinson, Teuta embraced the blockchain revolution, believing crypto to be one of humanity's most crucial inventions. Her fintech involvement began in 2014, focusing on crypto, blockchain, NFTs, and Web3. Known for her excellent teamwork and communication skills, Teuta holds a double MA in Political Science and Law, enjoys punk rock, chablis, and has a passion for shoes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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