Industry experts and Coinbase CEO Brian Armstrong quickly dismissed speculation about Coinbase issuing Bitcoin IOUs.
Crypto analyst Tyler Durden, a prominent critic, made claims over the weekend suggesting that Coinbase allowed BlackRock, the company managing the largest spot bitcoin ETF, to borrow cryptocurrency without requiring collateral.
Coinbase CEO Armstrong Denies “BlackRock IOU” Conspiracy
Durden went on to argue that such actions could facilitate market manipulation and profit from price fluctuations. These allegations stemmed from a criticism by Tron founder Justin Sun, who questioned Coinbase’s new product, cbBTC, for lacking Proof of Reserves, audits, and the ability to freeze balances.
In response to these accusations, Coinbase CEO Brian Armstrong clarified that ETFs are minted, burned, and settled on-chain within a day, allowing institutional clients to use trade financing and over-the-counter options prior to full settlement. Subsequently, Tyler Durden retracted his tweet.
Regarding IOU crypto tokens, they symbolize a form of indebtedness between parties, similar to an IOU notice used to track transactions.
Debunking Coinbase Conspiracy, Balchunas Supports BlackRock
Bloomberg ETF analyst James Seyffart dismissed the rumors as baseless conspiracy theories, emphasizing the transparency efforts of issuers like BlackRock. He highlighted that BlackRock, alongside other issuers like Bitwise, publicly share digital wallet addresses for increased transparency.
Bloomberg’s senior ETF analyst Eric Balchunas expressed frustration over the Bitcoin community attributing recent market pressure on ETFs instead of self-reflection.
He clarified that most Bitcoin investors are wary of government and large institutions, but BlackRock takes matters seriously and would respond sternly to any misconduct by Coinbase or its CEO Armstrong involving Bitcoin.
The article Coinbase Refutes BlackRock IOU Rumors, Experts & CEO Armstrong Weigh In was originally published on CoinGape.