Coinbase Denies Giving Special Bitcoin Borrowing Privileges to BlackRock
- Coinbase has firmly denied claims that it provided BlackRock with special borrowing privileges for Bitcoin.
- The controversy began when Tyler Durden claimed Coinbase gave Bitcoin IOUs to BlackRock, which could affect Bitcoin prices.
The worlds second-largest crypto exchange, Coinbase, has denied allegations that it granted BlackRock, the worlds largest asset manager, special privileges to borrow Bitcoin. These claims arose when analyst Tyler Durden suggested that Coinbase was issuing Bitcoin IOUs (essentially loans) to BlackRock, allowing it to borrow Bitcoin without maintaining proper 1:1 backing with its ETF, potentially manipulating the market.
In response, Coinbase clarified that it has never provided any preferential treatment to BlackRock. CEO Brian Armstrong emphasized that Deloitte regularly audits the company and must obey strict regulatory guidelines. He also stated that Coinbase cannot reveal institutional customers Bitcoin holdings unless required by law.
Criticism and Defense of cbBTC Amid Centralization Concerns
The controversy deepened with the introduction of cbBTC, a wrapped Bitcoin asset launched by Coinbase on its Base network. Justin Sun, the founder of Tron, criticized cbBTC for its lack of transparency, claiming that it operates like a centralized asset that could be frozen or confiscated. Further, Sun argued that such assets run counter to the decentralized principles of Bitcoin.
Despite these criticisms, Coinbase defended its practices and stated that it remains committed to transparency and compliance. However, the debate over centralizedness in the cryptocurrency world continues, as cbBTCs launch has sparked concerns about transparency in the market.
Coinbase collaborated with BlackRock earlier in August, where it enabled BlackRocks institutional clients to access crypto via its Prime service. Some community members continue to call for Coinbase to reveal its Bitcoin reserves to dispel any doubts regarding its wrapped Bitcoin product.
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Read more: https://thenewscrypto.com/coinbase-denies-giving-special-bitcoin-borrowing-privileges-to-blackrock/
Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M
