Grayscale Investments, a company that sells cryptocurrency investment products, has refused to provide and disclose its digital currency reserves, citing “security concerns”.

Grayscale Investments is a provider of cryptocurrency investment products.

Grayscale posted information regarding the security and storage of cryptocurrencies via a series of tweets on November 18 that were dedicated to addressing investor concerns.

The company stated that all cryptocurrencies that support its investment products are stored in the custodial service of Coinbase, but declined to disclose wallet addresses.

Grayscale continued by saying:

We realize that the previous point (not disclosing reserves), in particular, will be a disappointment to some, but it is not a good enough justification for violating the complex security mechanisms that have kept our clients’ funds safe for years.

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In the wake of FTX’s ongoing liquidity problems and eventual bankruptcy, Grayscale decided to take this step in response to the growing pressure on the cryptocurrency industry to implement and disclose the reserve.

Some people on Twitter disagreed with Grayscale’s view that security concerns were behind its decision to block its wallet addresses.

One user commented that although the addresses of Satoshi Nakamoto, the inventor of Bitcoin, are widely known and of more value to attackers, Satoshi’s Bitcoin remained secure.

Grayscale has published a statement co-signed with Alicia Haas, CFO of Coinbase, and Aaron Schnarsh, CEO of Coinbase Custody.

The statement details Grayscale’s holdings according to its investment products and the company reiterates that the assets are secure.

In addition, the statement stated that each product has its own titles on the network.

Grayscale also added that each of its products is regulated as a separate legal firm, and that rules, regulations, and contracts […] The digital assets underlying the goods are not rented, borrowed, or otherwise mortgaged.

Although Grayscale is best known for the Grayscale Bitcoin Trust (GBTC), a fund index that tracks the price of bitcoin, the company also offers other cryptocurrency price tracking products, such as Ethereum and Solana.

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Earlier, Genesis Global, which acts as GBTC’s liquidity provider, announced on November 16 that it had halted withdrawals, citing unprecedented market turmoil as the reason.

This unprecedented market turmoil has led to massive withdrawals from its platform, exceeding its current liquidity.

This has caused investor concerns.

Grayscale is also owned by the crypto-focused venture capital firm Digital Currency Group (DCG), which is also the parent company of Genesis.

Investors are speculating about GBTC’s exposure to Genesis, which may be one of the reasons why the company’s shares were sold at a discount of more than 43 percent to its net asset value.

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