Coinbase CEO Brian Armstrong on Tuesday suppressed concerns about the state of his company’s Bitcoin holdings following questionable suggestions from rival exchange owner Changpeng Zhao (CZ).
Binance’s CEO has since deleted his tweet, promising to “work together to improve transparency in the industry”.
What did CZ say?
CZs now deleted post drew attention to two separate claims about the exact amount of Bitcoin held by Coinbase.
The first was one pronunciation from Coinbase Custody CEO Aaron Schnarch on Monday, stating that the company held 635,000 BTC on behalf of the Grayscale Bitcoin Trust (GBTC). The second, on the other hand, was a 4-month-old headline about Coinbase’s exchange holding less than 600,000 BTC.
“Just mention news items, don’t make claims,” CZ said. “Glassnode probably has more up-to-date data.”
Concerns surrounding both Grayscale and Coinbase began brewing over the weekend after the former refused to implement on-chain proof-of-reserves for its crypto holdings, among a handful of others centralized companies.
The transparency measure aims to reassure creditors that their deposits are fully covered and not being mismanaged in secret suspected of the now-defunct exchange FTX.
Still, Twitter’s crypto community viewed his suggestive tweet as both ignorant and inappropriate. For example, Messari founder Ryan Selkis pointed out that Coinbase had already checked financial records showing it had about 2 million Bitcoin.
Binance’s CEO eventually deleted the tweet afterward receive a DM from Brian Armstrong detailing those same financials.
“If you see FUD, remember that our financials are public (we are a public company)”, clarified Armstrong in a follow-up tweet. Documents provided by the CEO revealed that his company had approximately $39.9 billion in Bitcoin by the end of the third quarter of 2022.
Contrasting Coinbase with FTX
CZ’s statement comes 16 days after publishing tweets that arguably sparked the bank run on FTX that led to its swift demise. Some interpreted Monday’s tweet as a deliberate attempt to take down another competitor, though CZ denied any such intentions.
During the week of FTX’s collapse, Brian Armstrong explained that Coinbase’s public auditing and 1:1 customer asset support would prevent it from potentially going under like FTX. He said Coinbase had no exposure to FTX, FTT or its sister company Alameda Research at the time.
Days before the bankruptcy, former FTX CEO Sam-Bankman-Fried claimed that FTX-backed client assets were 1:1 and that it had heavily regulated GAAP audits. Since then he has deleted the tweets making these claims.
“If an exchange keeps users’ assets as they are, no amount of other people’s tweets will cause problems. Easy,” said CZ last Thursday.
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