Jameson Lopp has argued that no sort of Bitcoin loss is solved by handing the asset to a 3rd occasion.
It led to a spat with analyst Willy Woo and different X customers over whether or not skilled custodians are safer in follow 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 shedding BTC.
“There’s objectively NO sort of loss that may be solved by giving your bitcoin to a 3rd occasion,” he wrote. “Third occasion custody is uncovered to each self custody danger PLUS MORE!”
A consumer named Dima conceded that custodians carry each particular person danger plus counterparty danger, however countered that most individuals are undone by their very own errors, resembling misplaced seed phrases and phished wallets. Moreover, some ETF custodians now supply bankruptcy-remote segregation, that means buyer belongings are stored aside from the agency’s personal, which exchanges as soon as lacked.
Lopp rejected the concept that most individuals can’t self-custody, suggesting they simply aren’t keen to place within the effort, and stated 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 shoppers and consultants who do the work for them.
Woo then posted the numbers: 1.57 million BTC misplaced by means of self-custody, 1.51 million on exchanges and none by means of 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 residence.”
The safety advocate replied that ETFs haven’t existed lengthy sufficient to undergo a disaster, and that just about all of them use the identical custodian. He then requested if Woo would slightly have danger unfold throughout 1000’s or thousands and thousands of newbie custodians, or concentrated with one skilled.
Coinbase Custody, which most spot ETFs use, has gone greater than eight years with out shedding cash, Woo identified, whereas self-custody misplaced 136,000 BTC and exchanges 13,000 BTC in that point. He referred to as the selection a false one: an individual’s personal self-custody and knowledgeable custodian every rely upon a single occasion doing its job, and the custodian wins due to decrease danger of bodily coercion by means of acts like wrench assaults.
Coinbase’s Document Is Contested
Lopp’s subsequent reply referred to as the never-lost-coins declare one which “appears to be in dispute,” pointing to Ari Paul’s latest allegation towards 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 lined up repeated hacks, affecting a minimum of a dozen different companies and greater than $1 billion.
Nonetheless, Paul’s claims are unproven, and he says a number of authorized processes relating to it are ongoing. Coinbase Assist additionally replied underneath his submit that it had messaged him on to look into the difficulty.
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