CZ Spreads Rumors About Coinbase’s BTC Reserves - Brian Armstrong Destroys the FUD by Reminding People That His Company Is Public.
Rather than spreading FUD in the midst of the storm, CZ would do better to help restore confidence.
Binance CEO Changpeng Zhao posted a tweet that forced Coinbase CEO Brian Armstrong to clarify his company's cryptocurrency holdings to avoid a (probably unwarranted) panic that could have once again battered the cryptocurrency industry.
It makes you wonder whose side CZ is playing on, as he repeatedly claims that it is essential to keep a cool head as the cryptocurrency world faces the FTX scandal. In a tweet on November 22, 2022, CZ published figures that, if true, could have embarrassed Grayscale and Coinbase.
On the one hand, the publication reverted to the previous day's statement by Coinbase Custody CEO Aaron Schnarch that the company held 635,000 BTC on behalf of the Grayscale Bitcoin Trust. On the other hand, the tweet also drew attention to a publication from four months ago, which pointed out that Coinbase held less than 600,000 BTC.
Such a publication could have knocked over the first domino and caused a disastrous chain reaction, which would put another major trading platform, Binance's number one competitor, in trouble and weaken the whole crypto industry even more.
Binance's CEO thus took precautions in posting this tweet, stating that he was merely “sharing news” and making “no statements,” while adding that “Glassnode likely has more up-to-date data.”
In short, we get the feeling that CZ has been playing with FUD ...
Coinbase was quick to respond to this Changpeng Zhao publication. In a series of tweets on November 22, 2022, its CEO, Brian Armstrong, reiterated that the finances of America's number one cryptocurrency exchange platform are public and that Coinbase is a public company. He added a link that points to the company's “letter to shareholders,” for the third quarter of 2022.
Brian Armstrong also pointed out that Coinbase holds about 2 million Bitcoin, worth approximately $39.9 billion:
He then spoke of the need to “come together” to build the industry “in a responsible way going forward,” and called on the community to “be wary of false information”:
“We all need to come together to build this industry in a responsible way going forward. Be wary of false information.”
Finally, Brian Armstrong wanted to remind people that if you see any FUD about Coinbase, the best thing to do is to check it out for yourself since Coinbase is a publicly traded company:
After Coinbase's CEO dotted the i's to quell potential concerns about the company's reserves, in another, more recent tweet, Changpeng Zhao indicated that Brian Armstrong had just “told him that the numbers in the articles are wrong,” referring to his original post.
The Binance CEO thus deleted his earlier tweet, while adding a reference to working “together to improve transparency in the industry.” Brian Armstrong had made thinly veiled accusations against FTX in the early days of the current crisis.
Coinbase and Binance must now offer a minimum guarantee as to the status of their cryptocurrency holdings, after all the talk from their leaders about the importance of transparency. But above all, CZ has to choose sides: FUD, or real information to try to bring calm.
Even if I'm not necessarily the biggest defender of Coinbase, I have to say that I have more confidence (even if it remains relative) in Coinbase's numbers than in Binance's in general. Why is that? The reason is simple, Coinbase is a publicly traded company and is closely monitored by the SEC. Coinbase can lie of course, but it will be much more complicated than for Binance which is not monitored so daily...
That said, keep a cool head. We are in the middle of the storm, but as a Persian proverb says: “This too shall pass.”
Some reading
AC or DC? How Nikola Tesla Enabled George Westinghouse to Win the War of Electric Currents Against Thomas Edison. Westinghouse won the no-holds-barred battle to electrify America.
How Behavioral Science Can Help Unlock the Mystery of Deviant Companies Like FTX. This will help you better understand how Sam Bankman-Fried was able to fool so many people for so long.
Jeff Bezos’ Sudden Interest in Philanthropy Won’t Erase the Misconduct That Allowed Him to Amass All Those Billions of Dollars. President Theodore Roosevelt was already pointing out this problem at the beginning of the 20th century.
Bitcoin Uses 60% Renewable Energy While Being 100x More Secure Than All Competing Cryptocurrencies Combined. The fundamentals of the Bitcoin revolution continue to strengthen month after month.
Why Alphabet or Meta Suffer So Much From Inflation. The answer lies in the decoupling of the offline advertising market from that addressed by Alphabet or Meta.
Coinbase, being the biggest publicly traded dog in the crypto industry, is much superior to its competitors IMHO. Many skeptical eyes are constantly watching Coinbase thereby reducing the chances of them lying about anything. The only real criticism I have is why the hell is Coinbase headquartered in New York where the regulation and taxes are oppressive when they could be almost anywhere else. For example they could move to Puerto Rico to take advantage of PR tax regime but still be on US soil. Buzzards are circling NY.