Ergo

Independent research verifies GBTC’s 633K Bitcoin: So why won’t Grayscale?

In the wake of the FTX crisis proof of reserves has been a trending topic, and it seems when firms are unwilling to provide it, analysts may step in.

With digital asset management firm Grayscale refusing to provide proof of reserves for its Grayscale Bitcoin Trust (GBTC), an independent analyst has spent days combing through the blockchain to independently verify its holdings.

The OXT Research analyst, Ergo, used on-chain forensics to confirm that as of Nov. 23 that the GBTC owns approximately 633,000 Bitcoin (BTC) held by its custodian, Coinbase Custody.

Since the collapse of FTX, there has been increasing pressure on other exchanges and digital asset managers to prove they hold the funds they claim. A GBTC collapse, or liquidation of its holdings, would be a serious black swan event. Concerns have been heightened due to Grayscale’s relationship with embattled crypto lender Genesis Global Trading, given both are subsidiaries of venture capital firm Digital Currency Group.

The independent verification of its holdings will give some level of confidence to investors of the product and the industry as a whole, and follow Coinbase attesting to the holdings earlier in the week.

Ergo announced they were looking into the holdings of GBTC in a Nov. 20 tweet after Grayscale cited security concerns as their reason for withholding on-chain proof of reserves on Nov. 18.

Knowing that most of the assets had recently been transferred from Grayscale’s previous security provider Xapo to Coinbase Custody, Ergo was able to use public data and chain forensics to attribute a balance of about 317,705 BTC in 432 addresses to likely GBTC custody activity.

Related: Bitcoin price still due $12K dip, says trader as ETF guru backs GBTC

To find the rest of the BTC held by GBTC, Ergo had to “scan the blockchain” in order to find additional addresses which fit the profile of those they originally found, and notes that while the analysis “certainly includes false positives and negatives,” the addresses they found contain holdings of BTC nearly identical to what GBTC claim to have.

Announcing they had confirmed the holdings, Ergo added:

“Which begs the question, why does Grayscale refuse to disclose their on-chain holdings?”

Twitter user Skyquake-1 offered a possible answer, having dug up GBTC’s Securities and Exchange Commission (SEC) filing from January 2017, which states that the custodian “may not disclose such [public] keys to the Sponsor, Trust or any other individual or entity.”

Ergo has received praise from many in the in the community, including crypto research firm Delphi Digital’s Ceteris, who retweeted the analysis and added:

“Ergo is a treasure”

The Twitter community has been a constant source of insight into the crypto industry, particularly since the fallout of FTX, and has even received praise from Coinbase CEO and co-founder Brian Armstrong and Elon Musk for their efforts.

Independent research verifies GBTC’s 633K Bitcoin: So why won’t Grayscale?

In the wake of the FTX crisis, proof of reserves has been a trending topic, and it seems when firms are unwilling to provide it, analysts may step in.

With digital asset management firm Grayscale refusing to provide proof of reserves for its Grayscale Bitcoin Trust (GBTC), an independent analyst has spent days combing through the blockchain to independently verify its holdings.

The OXT Research analyst, Ergo, used on-chain forensics to confirm that as of Nov. 23 that the GBTC owns approximately 633,000 Bitcoin (BTC) held by its custodian, Coinbase Custody.

Since the collapse of FTX, there has been increasing pressure on other exchanges and digital asset managers to prove they hold the funds they claim. A GBTC collapse, or liquidation of its holdings, would be a serious black swan event. Concerns have been heightened due to Grayscale’s relationship with embattled crypto lender Genesis Global Trading, given both are subsidiaries of venture capital firm Digital Currency Group.

The independent verification of its holdings will give some level of confidence to investors of the product and the industry as a whole and follow Coinbase attesting to the holdings earlier in the week.

Ergo announced they were looking into the holdings of GBTC in a Nov. 20 tweet after Grayscale cited security concerns as their reason for withholding on-chain proof of reserves on Nov. 18.

Knowing that most of the assets had recently been transferred from Grayscale’s previous security provider Xapo to Coinbase Custody, Ergo was able to use public data and chain forensics to attribute a balance of about 317,705 BTC in 432 addresses to likely GBTC custody activity.

Related: Bitcoin price still due $12K dip, says trader as ETF guru backs GBTC

To find the rest of the BTC held by GBTC, Ergo had to “scan the blockchain” in order to find additional addresses which fit the profile of those they originally found, and notes that while the analysis “certainly includes false positives and negatives,” the addresses they found contain holdings of BTC nearly identical to what GBTC claim to have.

Announcing they had confirmed the holdings, Ergo added:

“Which begs the question, why does Grayscale refuse to disclose their on-chain holdings?”

Twitter user Skyquake-1 offered a possible answer, having dug up GBTC’s Securities and Exchange Commission (SEC) filing from January 2017, which states that the custodian “may not disclose such [public] keys to the Sponsor, Trust or any other individual or entity.”

Ergo has received praise from many in the community, including crypto research firm Delphi Digital’s Ceteris, who retweeted the analysis and added:

“Ergo is a treasure”

The Twitter community has been a constant source of insight into the crypto industry, particularly since the fallout of FTX, and has even received praise from Coinbase CEO and co-founder Brian Armstrong and Elon Musk for their efforts.

670K follower ETH Classic account turns into Ergo: What happened?

Cardano founder Charles Hoskinson has repurposed the Ethereum Classic Twitter account to now benefit the Ergo Platform.

Followers of the Ethereum Classic Twitter account may have found themselves the unintended fans of an entirely new crypto project after Cardano founder Charles Hoskinson turned the account into the new community page for the Ergo community.

The Ethereum Classic account had built up over 600,000 followers since its inception in July 2016, and up until Sept. 15, it has been used to post about Ethereum Classic.

As of Oct. 6, however, the Twitter page now reflects the Ergo Platform, a proof-of-work (PoW) blockchain capable of facilitating smart contracts, similar to Ethereum, with links to Cardano.

In a lengthy thread pinned on Ethereum Classic’s new Twitter handle on Oct. 6, Bob Summerwill, the executive director of a public charity supporting Ethereum Classic, pointed the finger at Hoskinson for repurposing the account, noting that “6 years of community work has been erased.”

The new handle is yet to reach the follower numbers of its old account, with only 364 followers at the time of writing.

In the thread, Summerwill outlines how Hoskinson’s blockchain company Input Output Hong Kong (IOHK) withdrew from the ETC for a second time following a lack of support for a proposal of his and refused to talk about the Twitter account until a Sep. 6 Twitter post where he declared he would not be returning it to the ETC community.

The move by Hoskinson has essentially boosted the Twitter followers of the Ergo Platform, which has the old handle of ergoplatformorg with only 64,000 followers. The Ergo account holder has even directed its followers to its “new account” Ergo_Platform.

Related: Cardano bulls run out of steam after Vasil hard fork — 40% ADA price crash in play

Issues between Hoskinson and his former project are not new, with Hoskinson being well known for his dislike of Ethereum and going as far as calling Ethereum Classic a “dead project with no purpose.”