The claims that Coinbase did not hold real Bitcoin on behalf of BlackRock, which spread on social media last week, do not seem to have convinced BlackRock despite the trust environment provided. The world's largest asset manager requested an amendment to its ETF/BTC custody agreement with Coinbase yesterday evening. If the amendment is approved, Coinbase will now have to make the Bitcoin withdrawals requested by BlackRock to a public address. Transactions will also need to be completed within 12 hours.

BlackRock, the world’s largest with over $10 trillion in assets under management, has once again shown how much it values ​​customer trust. BlackRock took an important step following the claims that “Coinbase does not hold real BTC on behalf of BlackRock” that emerged last week.

The company has changed its ETF holding agreement with Coinbase. According to BlackRock’s new request, Coinbase will now have to complete withdrawals within 12 hours. Withdrawals will be made from a public address to avoid disputes.

BlackRock’s request included the following statements:

“Coinbase Custody (*Custody) will ensure that digital assets are withdrawn from the custodial account to a public blockchain address within 12 hours of receiving an instruction from the customer or the customer’s authorized representatives.”

What had happened?

As you may recall, last week, allegations surfaced on social media that Coinbase was holding IOUs, also known as debt documents, instead of real BTC for BlackRock’s IBIT ETF. The claim that “Coinbase holds paper Bitcoin, not real” was denied and refuted by many experts, especially Coinbase executives. However, with this move, BlackRock has shown that it will not take any risks.

Coinbase, which handles custody services for many of the issuing companies for both Bitcoin and Ether ETFs, has long been under pressure from the public to provide “proof of reserves.”

In these allegations last week, Coinbase CEO Brian Armstrong said that they are audited every year by Deloitte, one of the largest auditing companies in the world, and that customers do not need to have any doubts about this.

Eric Balchunas: These are not amateur companies

Eric Balchunas, an ETF expert, did not remain indifferent to the issue. Stating that companies like BlackRock are very professional and will not do any amateurism, Balchunas said:

“There are a lot of questions about this. Let's give a little more detail then… BlackRock runs its own blockchain node and every evening it receives balance information from wallets on Coinbase Prime to verify the number of BTC in the IBIT fund. They will probably show this to institutional investors if there is a demand for it now, but I don't think they will show it openly to the whole world. Because they get a lot of spam about this (like banned Bitcoin or NFTs)… If they show it openly, this situation will get out of hand. Look, BlackRock and other ETF issuers are not amateurs. BlackRock has more than 500 ETFs. They have been working with many custodians for decades without any problems. That's why all investment advisors in America trust these companies. These advisors know that a situation like the FTX-SBF incident will not happen to them.”

✒️Uzmancoin