Bitcoin Forum

If you are asked which company or any organisation fits market manipulation the most I bet many people will say its BlackRock, including myself.

Today it seems I might not be completely right, BlackRock now requires Coin base to deposit Bitcoin directly on-chain within 12hrs of instruction after concerns were been raised that Coinbase is selling "paper BTC" to ETFs.

https://x.com/BTC_Archive/status/1838227189835108862

This is shocking, isn't it? Feels more like BlackRock wants more transparency and assurance, if BlackRock is really pushing this then they don't like the way that Coinbase have been acting.

Guys I think we should all be focused on Coinbase from now on, something could really go bad with Coinbase, if you have some BTC on this exchange it might be a good idea to move them out especially if you are not actively trading on the platform.

My advice doesn't end with Coinbase only though, stop leaving your coins on any centralised exchanges in general.

This never stops being true.  Not your keys, not your bitcoin.

For some reason, I'm not that worried. I would be worried if this was concerning normal users but not in this case. With the Blackrock, and SEC involved into all of this. I can't imagine them even trying to pull such a move.

Regardless though, one should not store his funds for a long period of time in any exchange.

Not just Coinbase but CEX entirely. It is not a safe place to store bitcoin because any mistake will lead to lose. The drama happening in Coinbase lately is already a signal that people should have used to protect their asset by taking them to their personal wallets but it seems some people are still ignorant of the dangers of storing assets in CEX. It is popular thing here that wallets that one have the private keys are the only safe place to store assets so people should act accordingly.

Other then some random guys tweet is there any real news on this. A press release or other statement by BlackRock?

If not it's irrelevant since anybody can tweet anything about anything.

If BlackRock is now requiring this, it's a major change of policy and the agreement between the 2 of them and it's required to be disclosed by them.

-Dave

I tried to find something coming directly from BlackRock but I couldn't.
They have two Twitter profiles: BlackRock (https://x.com/BlackRock) and BlackRock_News (https://x.com/BlackRock_News).
This is their Press Releases (https://ir.blackrock.com/news-and-events/press-releases/default.aspx) page.
Additional company news can be found in their Global Newsroom (https://www.blackrock.com/corporate/newsroom).
Finally, this isn't an official source, but Yahoo Finance (https://finance.yahoo.com/quote/BLK/press-releases/) doesn't link to such information either.

Still, all this doesn't mean that the information isn't correct.

Good advice, but let's say you are years late - because everyone who still thinks that CEXs are some kind of bank that can store cryptocurrencies in the way that regular banks "store" fiat, is actually living in one big misconception. Nothing bad will happen with that CEX, they are literally under the control of the state and have a privileged status, which can be seen from the fact that they are favored by the majority of spot BTC ETFs.

Here is a good topic from 4 years ago -> Coinbase the most anti-Bitcoin organisation. Make #DeleteCoinbase great again (https://bitcointalk.org/index.php?topic=5253616.0)

Bitcoins history is littered with exchange failures, hacks & scammers. There is a reason that the phrase, not your keys not your coins exists. Self custody is really important so yes, please take your coins off Coinbase & any other exchange.

I believe it is more like a fud attempt than a news about truth.

Bitcoin Spot ETFs were designed that ETF companies will have to use customer capital, and they must buy bitcoin first with equivalent value of ETF shares that they will mint later.

Most of Bitcoin Spot ETFs have their custodians is Coinbase ^[1] and months ago, it raises big concern on Coinbase factor here. If anything goes wrong with Coinbase, you know what will happen.

^[1] https://blockworks.co/bitcoin-etf

Another thing about Coinbase, expensive trading fee and withdrawal fee.

• Problems with Coinbase withdrawal fee. (https://blog.lopp.net/problems-with-coinbase-withdrawal-fees/)
• It is similar to what I discussed years ago. Old story. Exchanges get profits from users' withdrawal fees. (https://bitcointalk.org/index.php?topic=5306935.0)

BlackRock finally learned "not your keys, not your bitcoin." They wanna store on chain Bitcoin by themselves instead of letting CB store it for them.


Or they learned from Mtgox's case. So, they wanna ensure they own real bitcoin, too.

Self custody should be the only option if you want maximum safety. Unless you make trades everyday it doesn’t make any sense to hold coins on any exchange anyway. I would only keep some coins if they paid me 5% interest on my btc. Otherwise I will be funding their liquidity for free. I only keep some coins on some casinos and it is because they pay me interest and it is not all my funds. Just a small portion.

Your advice is not redundant but is it too late to give this advice to people after what happened with Mt.gox and FTX? I think everyone is aware of the risks of storing assets on centralized exchanges after their collapses.

I also read some Fuds about Bitcoin ETF a few days ago but Blackrock sending a request to Coinbase just confirms that the news being spread is fake. As you said: they want transparency, they want everything to be clear, and they are not implying that Coinbase is shady or unsafe as you say.


I don't advocate using Coinbase because as far as I know they often freeze user accounts for no reason and that's very annoying. But what you spread is not true, so far Coinbase is safe.

just for some detail and context


its been a long known fact that coinbase hoards coins in cold wallets. which everyone knows is a blockchain wallet that is completely separate and different to their online market order portal/database. so whilst people are trading coins on their exchange order books/database and updating their exchange balance database records. the coins themselves do not move unless withdrawn

so when coinbase is acting as both an open exchange and custodian for ETF, there is little need of movement of cold store coins from the exchange facility of coinbase and the custodian facility of coinbase. and so the only 'accounting' that can be relied upon is not blockchain data but instead coinbases internal database of account activity.. this has lead to some fear and risk that if coinbases internal records got corrupt then there is little to no known outside evidence that coins deposited, traded and then converted over to declared custodian housed coins, are actually for a ETF, nor proof of transfer had occurred.

and so these ETFS want coins traded in the exchange section to then be moved from that cold wallet, to a separate cold wallet for the ETF custody section. thus showing on the blockchain a list of coins sectioned off just for particular custody proofs of ETF's

its also a known detail(explained in coinbases terms and blackrocks etf application pages) that coinbase does not reveal its full methods of securing custody/ownership of funds it holds of its customers and how it also does not want to clarify its own accounting methods and audits of custody coins. and so again this makes ETF not fully 100% able to audit coinbase to prove that coinbase is not 'double dipping' coins (possibly suggesting certain coins are of company Y ownership whilst secretly telling company Z the same coin allotment are theirs too.. )

so these etf's want more transparency from coinbase to show better proof of custody and auditable methods that can protect ETF and trust coinbase to be their custodian

As I accumulate more money, I was tempted and thinking to save some coins on exchanges and earn 6% APR but I still saw it not worth it than to hold my coins on a noncustodial wallet which I have the private key by myself and I have complete control over my coins, unlike to store it on the exchanges. Most exchanges offer savings and earning profits daily using APR for the calculation but people need to be very wise. Exchanges are not wise places to store coins. I prefer to avoid having coins on the exchanges. The only reason I have few coins on an exchange is because of trading but the amount is very small.

I have not used Coinbase so I don't have much input on that exchange platform and also it has been a music in the forum at all corners from local boards to the general boards. Nobody should keep their coins in any centralized exchanges because we don't have control over the coins and we can only see the coins but the company (exchange) control everything. They can block and close your account. And we were advise to keep and store our coins in a self custodial wallets which you control your funds by ourselves. Selling "Paper BTC" is something I am still thinking how possible is it. Save yourselves from any collapse of exchange. Prevention is better than crying.

The source of this news was not given, it just came from a random tweet that has gotten over a million views and many reposts. But there is some level of truth in some rumours. I know that Coinbase will refute this claim and tell investors that their funds are safe. But these CEX can do anything to make a profit so I don't doubt the claim that Coinbase might be deceiving BlackRock. People forget easily and want to always learn the hard way just like in the FTX case. The money you keep in centralised exchanges is not yours, you can lose it at any time.     

It is quite possible mate I actually have this belief that it’s what the other exchanges do too, your real bitcoin is never on that exchange although most of them claim that the coins have been moved to custodial wallets but who knows how true that is, they are not different with the way the fiat banking system operates they simple Just drop figures on your wallet and then take the real money away or borrow it out.

This kind of thing was what lead to a scenario where many investors have a day where they request all their funds from exchanges to actually get a glimpse of which of this exchanges are lying. I wouldn’t say there are actually selling paper btc but I have always been curious on why we see the announcement of big buys by huge investors and yet we do not see any significant pump

Yes, avoid storing your coins at third party platforms. Anything can go wrong with them at anytime, and once it happens your money is gone. Then you have a lot of headaches and troubles counting on the judiciary system and authorities to retrieve part of the funds back to return it to customers.

Meanwhile, you could just acquire a hardware wallet and store your coins this way, having total control over your funds at anytime. You can also keep the coins untouched for years and once you decide accessing it, your money will be still there waiting for you.

No risks of having your money stolen or seized. The only risk consists in you not being careful enough to store your wallet and keys safely... But that shouldn't be an issue at all for organized and responsible individuals.

In the first place exchange is just use for changing of your assets and not for storing of your funds and we know how does Coinbase has a lot of issues regarding with the data breaches personally before I was amazed with the Coinbase but now with their issues i don't seem they are still reliable ar this time. If you can afford with the Bitcoin I guess nothing wrong affording hardware wallet at least right or even hot wallet to make sure your funds are safe.

The claims of Coinbase selling paper BTC to BlackRock was completely made up by influencers looking for clout. BlackRock didn’t want their investors panicking over this FUD so they amended their agreement with Coinbase so that on-chain settlement happens more frequently.

Keeping your Bitcoin off of custodial exchanges should be standard practice by now for most people so there is nothing to really be concerned about if you were being responsible and holding your own private keys.

Great effort on the warning, OP, but there’s no need to panic since the CEO of Coinbase has already denied that rumor.

BR could have started from the beginning with self-custody, but they didn't do it - what do you think for what reason? If they were capable of doing that, they wouldn't have entrusted the job to someone else, and no matter how strange it sounds, that someone is still a professional in that business. CB has very strict criteria when generating wallets, and also regarding the storage of private keys - there was an article a few years ago that described the entire procedure in detail.

The rumor was probably started by people working at a different exchange that is about to go under and they figured they could cause other people some doubt.

The funny part is that things like this are the reason that a lot of people want to go with BlackRock & Coinbase.
They have massive amounts of regulation to deal with and a ton of government people crawling though their books on a regular basis.

Although they might be able to get away with some things, the chances of them not having what they say they have vs other off shore unregulated exchanges is a lot less.

-Dave

I suppose OP is right that BlackRock wants more transparency, ensuring that when Bitcoin is purchased with its ETF, the ownership is directly on-chain. Given the reputation of BlackRock, it is expected from them to set higher standards in how Coinbase handles custody. That may be a signal that the practice by Coinbase is getting more scrutiny, especially with their plan to launch "Coinbase WBTC," which raised even more concerns  .

I totally agree that we should avoid leaving funds on centralized exchanges like Coinbase. All this push for faster on-chain settlement does seem to come together with the greater crypto philosophy of self-custody. If BlackRock is concerned, that could indicate much larger issues later on for Coinbase. In all probability, yes, moving assets off exchanges into personal wallets where we got full custody, especially when one is not trading actively, it is the only best way.

It's always only a rumor until it becomes true.

Either way, I make it a habit to hold all my Bitcoin in my own private wallet so that no third party can "de-decentralize" my money against my will.

I mean, when your Bitcoin is laying on some third party wallet, like that of a crypto exchange, is it not technically just fiat under a different name?

The thing that a lot of people are missing is the size of BlackRock and the way they are regulated and what they have to go though.
IF this was true AND they did not tell their investors within a short period of time that they thought there was an issue and something happened the lawsuits would be epic.
As in they would be studied in law schools for years to come.

We are not talking about some unregulated off shore company like FTX.

-Dave

How about take your Bitcoin off any exchange? Not alone Coinbase. :D

It's always said, not your keys, not your coins. So I am sure those who are holding their Crypto on an exchange needs to understand this that until and unless you withdraw them in your hardware wallet or even wallets like Metamask, the money isn't yours. It's owned by an exchange and they can lock you out anytime for any reason.

It sounds like a non-event to me. Big enterprises require many kinds of special stuff from their providers all the time, so it doesn't really make sense to me that someone would pull all their BTC from Coinbase simply because someone thinks that they are depositing paper money.

That being said, I do not support Coinbase at all.

As many as 10 out of 11 bitcoin ETFs use Coinbase as their bitcoin custodian , and BlackRock is not a small or easily bullied institution in the financial markets. If CB really cheated with BR and other funds, do you think they will let CB off easy?
As you said , it's all just a rumor from a random unverified tweet, why are so many of us exaggerating the issue so unnecessarily? Bitcoin ETF is an agreement between investment funds and Coinbase and is approved by the SEC .  I don't think CB will do anything stupid, they can cheat or take bitcoins from regular users but with bitcoin ETFs it's a completely different case .

I think this is FUDs and we should stop spreading it .

Those who keep themselves informed about such affairs know about it. People on this forum and other communities who understand the benefits of self-custody and have found the right sources of information to warn them of custodial exchanges are also aware of it.

I was surprised to read the information in this article (https://unchainedcrypto.com/amount-of-bitcoin-and-ether-on-exchanges-reach-record-multi-year-lows/#:~:text=Just%20over%2011.5%25%20of%20BTC's,from%20blockchain%20analytics%20firm%20Glassnode.). If the data from June of this year is true, around 11.5% of bitcoin's overall supply is kept at addresses held in exchanges. I expected this number to be higher and closer to the 25-30%. It's worth pointing out that the data can only consider wallet addresses they know belong to exchanges. Surely, there are those they aren't aware of, which would increase that given percentage.

I loan money to the broke ass US Government by purchasing Treasury Bills that are maintained in the custody of my broke ass government regulated brokerage accounts.
I own shares of Blackrock that are maintained in the custody of my broke ass government regulated brokerage accounts.
I own shares of Coinbase that are maintained in the custody of my broke ass government regulated brokerage accounts.
I own shares of the available crypto ETFs and MSTR that are maintained in the custody of my broke ass government regulated brokerage accounts.
I own free and clear my home that the broke ass government taxes me on every year.
I own precious metals, crypto, and other tangible assets that I maintain custody of since I don't have enough faith in my financially irresponsible broke ass government to trust them with all of my assets.

Don't keep all of your eggs in one basket.  8)

If anyone argues against this, they are a damned fool.  Coinbase has been one corrupt shitty exchange every since I "got in to" bitcoin.  They were sorta the really only player in town for quite some time.  I used them back in the day when their exchange would freeze seemingly every single time there was any sort of sell off, didn't even have to be all that big.  They have locked up accounts and stolen bitcoin from friends of mine and I've heard countless stories of people get fucked by them.  SO yes, f Conbase.

its been long known that coinbase didnt want to reveal its security of its custody trust/cold wallets specific to the custody service. and even in blackrocks ETF applications reveals coinbase dont reveal critical details to blackrock. however now that blackrock has a substantial hoard, they want more transparency and accountability. because they noticed when they done coinbase OTC deal to buy coin, and then move coin to custody to then treat as locked coins to then do their ETF stuff, the coinbase transactions on the blockchain didnt completely match up to movements from the trade to the custody services.

this meant they only had the coinbase database/platform account balance to rely on.
its the reliance of the coinbase platform database and not having reliance of blockchain utxo proofs that raised the alarm of "paper btc"

..
with $23b (363k btc) held in coinbase just for blackrock alone, im pretty sure new relations, negotiations of proof policies have been handled before this news got public attention

Ever since I realized the risk of storing my crypto asset on centralized exchange, I stopped saving crypto on exchange and I always discourage my friends from doing so.

This has always been the main golden rule here in crypto space. It might sounds basic and repetitive but this is something that will really be saving up your ass on losing up your coins.
"Not your keys, not your coins" this is really that a line that often heard about and this is where newbies should really be thinking off when it comes into this aspect.

As for those events talking or involving those institutions then just like you then im not really that having any concerns nor really that being mindful on whats happening around.
We do know that there are really that tons of drams thats happening into that area on which it would really be that obviously shows that they are really just doing those casual stuffs around.

As for security of coins then better always choose on storing up on non-custodial ones on which this is really the most basic thing that you do learn on crypto space.

All exchanges also do not guarantee that the coins we have will be safe for a long time, some bad things can happen like some exchanges that have disappeared from the cryptocurrency world. Since the beginning of my acquaintance with Bitcoin, I have never left my Bitcoin or Altcoin on a cryptocurrency exchange because there was once someone who put his coins on a crypto exchange for a long time, but after that he tried to check his coins and it turned out that his coins were no longer on the crypto exchange.

It's completely wrong leave funds for long time on exchange if not using them to trade, for me I would prefer when trading then moved fund back to exchange to execute that but if not in used there is needs to pull them off from centralized exchange. I goes by the popular phrase 'not your key, not your coin' and there is every chance of losing ones asset.

Do remember most coins are getting abandoned and delisted from crypto-exchanges, so it should never be an option to store your coins in them for long period of time.

I perceive it is just a FUD. Be it paper BTC or not, it will only be confirmed BTC in the chain. Whether they hold and share it in any form, what we should look out is the on-chain settlement.

When BTC is in Coinbase or with BlackRock, is it still called BTC or only considered BTC when it hits the BTC network.

still, if people are concerned about this, coinbase can just prove it that this just nothing but clout and the BTC per agreement exists on-chain.

doesn't hurt to prove credibility and reliability of a company knowing such concerns arise.

this is also why I just avoid using wrapped BTC in altcoin chain, the centralized custodian of the underlying BTC just putting some additional layer of risk and is subject to depeg.

I’ve never liked coin base as a platform anyways nor have I used it in years. They are the number one custodian for black rock and the US government tho so they will definitely be shaping up even more so I’m sure of it.

The reason is that many are not capable of being their own bank, and that is why it is much easier for them to transfer that responsibility to someone else, regardless of the fact that there is a great risk behind this transfer of responsibility. In addition, the large following of the great crypto messiah who is just getting out of prison obviously believes in what he claims...

Withdrawing Bitcoin from Coinbase does not mean not using Coinbase as a marketplace to trade Bitcoin or Altcoin. The negative information about Coinbase recently has been very sensational and detrimental to Coinbase, I am sure that Coinbase will not do anything that will harm it.
For me, all exchanges have the same uses and benefits, it's just that if you want your Bitcoin and Altcoin to be safe, it is better to move all coins to a personal wallet that we have after doing various activities on a centralized exchange.