Billionaire Brian Armstrong is famous for being the CEO and founder of Coinbase.

Coinbase is one of the largest cryptocurrency exchanges, valued at around $20 Billion. Down from $85 billion when it first listed on the stock market.

Armstrong, a Bitcoin native and familiar with payment systems through his work with Airbnb, has received media attention for actively making Coinbase’s workplace free of political activism and discussing social issues at work.

Armstrong said he wanted to avoid “internal strife” that has hurt worker productivity at Facebook and Google. He says employees air social and political concerns in internal chatrooms and occasionally take to the streets to protest.

It’s a policy that is a bold move, especially for something popular in culture.

Armstrong offered severance packages for Coinbase employees uncomfortable with this policy, and as a result, 5% of the company left, which amounted to 60 employees.

Before this move, the Black Lives Matter movement had gained traction after the murder of George Floyd, and Armstrong Tweeted.

Brian Armstrong:

“I’ve decided to speak up.

It’s a shame that this even needs to be said in this day and age, but racism, police brutality, and unequal justice are unequivocally wrong, and we must all work to eliminate them from society.”

When he introduced the policy, he received an enormous backlash from the general public and internally from his staff.

Brian Armstrong Responded:

“It has become common for Silicon Valley companies to engage in a wide variety of social activism, even those unrelated to what the company does.”

“While these efforts are well-intentioned, they can destroy a lot of value at most companies, both by being a distraction and creating internal division.”

Show Us Your Money, Brian.

FTX was a cryptocurrency exchange that used customers’ deposits to trade with and get loans.

When news broke that FTX were propping up their native token FTT with borrowed funds, it caused their customers to try and withdraw funds.

Crypto’s version of a “bank run” caused FTX to lose $16 billion overnight and go bankrupt.

And, with it, crashing the entire market.

If you owned some crypto, you’d feel the market correction’s pinch.

At the time of the crash, if you held some FTT or left your funds on the FTX exchange, you most likely would have gone to zero.

It’s now encouraged Cryptocurrency exchange founders to come forward and offer more transparency about what they’re doing with the customer’s funds and disclosing their proof of reserves.

In an attempt to dispel fears, Armstrong showed that his company Coinbase holds around 2 million Bitcoin worth $39.9 billion as of September 30, 2022.

The public report also showed other reserves.

The chart below shows percentages held in each asset, but their total balance on the platform is $100 Billion.

Armstrong sent out this Tweet along with a link to Coinbase’s Financials.

Brian Armstrong:

“If you see FUD out there — remember our financials are public (we’re a public company)

We hold ~2M BTC. ~$39.9B worth as of 9/30 (see our 10Q)

From now on, we all need to come together to build this industry responsibly.

Be wary of false information.”

Armstrong also shared the company’s shareholder letter, highlighting a consolidated list of Coinbase assets.

In a strange twist of events, Armstrong provided comfort to the market but also had to clarify to his competitor, Binance CEO Changpeng Zhao, who questioned Coinbase’s Bitcoin holdings.

Changpeng Zhao, Binance CEO:

“Brian Armstrong just told me the numbers in the articles are wrong. I deleted the previous tweet.

Let’s work together to improve transparency in the industry.”

After the FTX collapse, there should be constant chatter concerning proof-of-reserves and financial audits of the crypto trading platforms.

As this trend gains traction with exchanges, some have announced a proof of reserve audit on themselves.

While the traditional finance world is probably sitting back in their armchair with a bowl of microwave popcorn, saying, “I told you so”, bankers have entirely different reserve rules.

According to the European Central Bank website, the minimum reserve requirements are to hold funds for six to seven weeks, which is the maintenance period.

Banks must hold at least 1% of customers’ deposits at their national central bank.

Final Thoughts.

Coinbase is easy to use and an American company listed on the Stock Market, so its financials are open to public scrutiny.

It’s why I use them.

I trust them, but not with my livelihood.

This recent FTX crash has scared the sh*t out of me, if I’m being honest. Self-custody is the only thing that fixes this, although, despite Sam Bankman-Fried stealing customer deposits, I still believe in some centralisation.

I’ll likely get some stick for saying that, but it’s true. More people lose their private keys through self-custody than by getting hacked.

Having a trusted custody partner will also help the masses adopt crypto, which needs to be safe and easy for someone like my Grandma to use.

There is no way anyone who isn’t remotely crypto-native can work a hardware wallet without some substantial guidance.

Some centralisation is good.

My assets are on the Ledger, but until it’s as easy as setting up a Facebook account, self-custody will be for the minority of Crypto users.