Coinbase was trending on Twitter on Nov. 22 after Binance CEO Changpeng Zhao, also known as CZ, sent out a tweet that appeared to question Coinbase’s Bitcoin holdings.
In the since-deleted tweet, CZ referenced a yahoo finance article that claimed that “Coinbase Custody holds 635,000 BTC on behalf of Grayscale.” CZ added: “4 months ago, Coinbase (I’m assuming the exchange) has less than 600,000,” with a link to a 4-month-old Bitcoinist article. The Binance CEO clarified that he was merely citing “news reports”, and not making any claims of his own. However, his tweet was not well received by the cryptocurrency community.
Shortly thereafter, Coinbase CEO Brian Armstrong responded indirectly to CZ in a series of tweets, stating: “If you see FUD out there – remember, our finances are public (we are a public company),” with a link to the Coinbase Q3 shareholder letter. He clarified that his company owns “~2M BTC. ~$39.9B worth as of 9/30 (see our 10Q).”
If you see FUD out there – remember, our financials are public (we’re a public company) https://t.co/ayzN0zaqgT
—Brian Armstrong (@brian_armstrong) November 22, 2022
CZ deleted his tweet soon after, stating: “Brian Armstrong just told me the article numbers are wrong. Deleted previous tweet. Let’s work together to improve transparency in the industry.”
Brian Armstrong just told me the numbers in the articles are wrong. Deleted the previous tweet. Let’s work together to improve transparency in the industry.
— CZ Binance (@cz_binance) November 22, 2022
Given recent market events, and Binance’s perceived role in instigating them, some have called out CZ for the insinuations. To recap, the FTX sell-off crisis, which led to a general spiral in the market over the past two weeks, is widely believed to have been initially sparked by the Binance CEO after his tweets caused panic and a run on the bank. in FTX.
Will Clemente, co-founder of digital asset research firm Reflexivity Research, shared on Twitter: “That last tweet CZ made about Coinbase’s Bitcoin holdings and just deleted was not a good picture. I understand the argument that he’s trying to protect the industry, but CZ is more than smart to know that the exchange and custodial wallets are separate.”
That latest tweet CZ made about Coinbase’s Bitcoin holdings that he just deleted wasn’t a great look. I get the argument that he’s trying to protect the industry but CZ is more than smart enough to know that exchange and custody wallets are separate.
— Will Clemente (@WClementeIII) November 22, 2022
Mario Nawfal, founder and CEO of IBCgroup.io, shared on Twitter: “Is CZ implying that Coinbase custody is NOT holding 1 to 1 BTC on behalf of Grayscale Trust???? See his latest tweet. This is a concern that never had until now. This is a VERY serious question (implied accusation?) to ask.”
Is CZ implying Coinbase custody does NOT hold 1 to 1 BTC on behalf of Grayscale Trust????
See his latest tweet. This is a concern I never had till now.
This is a VERY serious question (implied accusation?) to ask.
Will discuss this on the show and add points below
— Mario Nawfal (@MarioNawfal) November 22, 2022
Analyst, trader and investor @360_trader shared: “CZ just proved today that all he cares about is his empire. HE IS NOT HERE to watch out for the industry… he deleted the tweet… But now… as I already I expected it… He has exposed himself as a villain.”
CZ just proved today he’s all about one thing… his empire.
He IS NOT here to look out for the industry…he deleted the tweet…
But now…as I already expected…
He’s exposed himself as a villain.
—360Trader (@360_trader) November 22, 2022
Trader and investor “BobLoukas” called out CZ for his lack of diligence before tweeting. He shared: “CZ: ‘Let’s work together to improve transparency in the industry.’ Also CZ: Let me tweet to millions some random FUD in the middle of a bear market major liquidity event before maybe just getting to confirm.”
CZ “Let’s work together to improve transparency in the industry.”
Also CZ – Let me tweet to millions some random FUD in the middle of a bear market major liquidity event before maybe just reaching out to confirm. https://t.co/UA00hieJsC
—Bob Loukas (@BobLoukas) November 22, 2022
On Nov. 18, cryptocurrency investment product provider Grayscale Investments shared that all digital assets underlying Grayscale’s digital asset products are stored in the custody of Coinbase Custody Trust Company, LLC. Although the company has declined to provide proof of on-chain reserves or wallet addresses to show the underlying assets, citing “security concerns.” At press time, Coinbase’s $COIN token had seen a 5.3% increase in price.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.