CZ referenced a Yahoo Finance article in the now-deleted tweet, claiming that Coinbase Custody holds 635,000 BTC on behalf of Grayscale. "4 months ago, Coinbase (I assume exchange) had less than 600K," he added, linking to a Bitcoinist article from four months ago. The CEO of Binance stated that he was simply quoting news reports and not making any claims of his own. His tweet, however, was not well received by the cryptocurrency community.

Soon after, Coinbase CEO Brian Armstrong reacted indirectly to CZ in a series of tweets, stating, "If you see FUD out there - remember, our financials are public (we're a public company)," with a link to Coinbase's Q3 shareholder letter. He clarified that his company possesses 2 million BTC. As of September 30th, it was worth $39.9 billion.

CZ quickly deleted his tweet, stating, "Brian Armstrong just told me the numbers in the articles are wrong. I removed the previous tweet. Let us collaborate to improve industry transparency."

Some have blamed CZ for the insinuations, citing recent market events and Binance's perceived role in instigating them. To recap, many believe that the Binance CEO's tweets induced panic and a bank run on FTX, causing a liquidation crunch that led to a market spiral over the past two weeks.

"That latest tweet CZ made about Coinbase's Bitcoin holdings that he just deleted wasn't a great look," Will Clemente, co-founder of digital asset research firm Reflexivity Research, said on Twitter. “I understand that he is attempting to protect the industry, but CZ is more than aware that exchange and custody wallets are distinct," he added.

"Is CZ suggesting Coinbase custody does NOT hold 1 to 1 BTC on behalf of Grayscale Trust?" tweeted Mario Nawfal, Founder & CEO of 

"CZ just proved today that he's all about one thing... his empire," analyst, trader, and investor @360 trader said. “He IS NOT here to protect the industry... he deleted the tweet... But now... as I had predicted... He's revealed himself to be a villain."

Before tweeting, trader and investor @BobLoukas chastised CZ for his lack of due diligence. "CZ 'Let's work together to improve transparency in the industry,” he said. “Also, CZ, please allow me to tweet some random FUD to millions of people in the middle of a bear market major liquidity event before reaching out to confirm."

Grayscale Investments, a cryptocurrency investment product provider, announced on November 18 that all digital assets that underpin Grayscale's digital asset products are held in the custody of Coinbase Custody Trust Company, LLC. Despite the fact that the company has continued to refuse to provide on-chain proof of reserves or wallet addresses to demonstrate the underlying assets, citing security concerns. At the time of publication, the Coinbase token price had risen by $5.3%.

What do you think about Changpeng Zhao’s deleted tweet about Coinbase’s holdings? Drop your comments by sharing this article on social media.

Nov 23, 2022
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