Jameson Lopp has argued that no kind of Bitcoin loss is solved by handing the asset to a 3rd get together.
It led to a spat with analyst Willy Woo and different X customers over whether or not skilled custodians are safer in apply than people holding their very own keys.
A Custody Argument Performs Out on X
In a submit on the social platform, Lopp took goal on the declare that an ETF removes the concern of dropping BTC.
“There’s objectively NO kind of loss that may be solved by giving your bitcoin to a 3rd get together,” he wrote. “Third get together custody is uncovered to each self custody threat PLUS MORE!”
A person named Dima conceded that custodians carry each particular person threat plus counterparty threat, however countered that most individuals are undone by their very own errors, comparable to misplaced seed phrases and phished wallets. Moreover, some ETF custodians now supply bankruptcy-remote segregation, which means buyer belongings are saved aside from the agency’s personal, which exchanges as soon as lacked.
Lopp rejected the concept most individuals can’t self-custody, suggesting they only aren’t keen to place within the effort, and mentioned that segregation “doesn’t do jack if the underlying asset is misplaced.” He used his agency, Casa, for example, noting that it has many older purchasers and consultants who do the work for them.
Woo then posted the numbers: 1.57 million BTC misplaced via self-custody, 1.51 million on exchanges and none via custodians of spot ETFs. The figures got here from a December 2025 report by River. A contemporary regulated custodian, he wrote, does a greater job than “mothers and pops at dwelling.”
The safety advocate replied that ETFs haven’t existed lengthy sufficient to undergo a disaster, and that almost all of them use the identical custodian. He then requested if Woo would relatively have threat unfold throughout 1000’s or tens of millions of beginner custodians, or concentrated with one skilled.
Coinbase Custody, which most spot ETFs use, has gone greater than eight years with out dropping cash, Woo identified, whereas self-custody misplaced 136,000 BTC and exchanges 13,000 BTC in that point. He known as the selection a false one: an individual’s personal self-custody and knowledgeable custodian every depend upon a single get together doing its job, and the custodian wins due to decrease threat of bodily coercion via acts like wrench assaults.
Coinbase’s Report Is Contested
Lopp’s subsequent reply known as the never-lost-coins declare one which “appears to be in dispute,” pointing to Ari Paul’s latest allegation in opposition to Coinbase.
As CryptoPotato reported in September, the BlockTower Capital founder posted on X that Coinbase had “misplaced” $25 million belonging to his agency years in the past and later alleged that it had coated up repeated hacks, affecting at the least a dozen different corporations and greater than $1 billion.
Nevertheless, Paul’s claims are unproven, and he says a number of authorized processes relating to it are ongoing. Coinbase Help additionally replied below his submit that it had messaged him on to look into the difficulty.
The submit Do Bitcoin ETFs Take away Custody Threat? Analysts Disagree appeared first on CryptoPotato.