French auditing firm Mazars has ceased all work with cryptocurrency businesses, including Binance, KuCoin, and Crypto.com, the latter two of which were confirmed by Binance.
Since then, we have taken down all of Mazars’ crypto reports
A Mazars spokesman reportedly told Yahoo Finance that the company “paused its work relating to the issuance of proof of reserve reports for firms in the cryptocurrency sector due to concerns regarding the way the public perceives these reports.”
Among the notes made by Mazars’ auditors was “Reserves Verification.”
According to those requirements, work on a report that is required by established guidelines is complete. They do not reflect the auditor’s opinion on the topic or serve as an endorsement. Instead, they focus on presenting limited findings from the time period when consensus processes were applied to the topic.
Initially, Bloomberg was the only media outlet to report Mazars’s decision. Mazars has chosen to leave the cryptocurrency exchange business as users and investors seek clarity in the wake of the FTX crash.
Investors’ attention has been on the largest cryptocurrency exchange, Binance, since the business delivered a report from Mazars last week that did not demonstrate full openness. Furthermore, the exchange temporarily disabled withdrawals of the stablecoin USDC during a period of record withdrawals due to daily banking hour constraints.
Analysts and other market participants have previously complained that Mazars’ reports lacked a judgment or assurance conclusion regarding the reliability of their clients’ financial statements.
Binance’s global communications head, Dewi Mustajab, told Yahoo Finance, “Unfortunately, this means that we will not be able to work with Mazars for the moment.”
After the accounting firm’s suspension was announced, Crypto.com issued the following statement: “We will continue to cooperate with competent audit businesses in 2023 and beyond, as we seek to encourage transparency across the whole sector.” Mazars, who were hired in November, completed the report, which was made public on December 7.
A company official stated that KuCoin was “willing to engage with any known and competent auditor” as of December 8, when Mazars published a proof of reserve report on the company’s reserves.
Because of this, cryptocurrency markets were under stress, and Bitcoin fell below $17,000; however, early this week, Bitcoin rose above $18,000 for the first time since the FTX crisis.
Since then, we have taken down all of Mazars’ crypto reports
A Mazars spokesman reportedly told Yahoo Finance that the company “paused its work relating to the issuance of proof of reserve reports for firms in the cryptocurrency sector due to concerns regarding the way the public perceives these reports.”
Among the notes made by Mazars’ auditors was “Reserves Verification.”
According to those requirements, work on a report that is required by established guidelines is complete. They do not reflect the auditor’s opinion on the topic or serve as an endorsement. Instead, they focus on presenting limited findings from the time period when consensus processes were applied to the topic.
Initially, Bloomberg was the only media outlet to report Mazars’s decision. Mazars has chosen to leave the cryptocurrency exchange business as users and investors seek clarity in the wake of the FTX crash.
Investors’ attention has been on the largest cryptocurrency exchange, Binance, since the business delivered a report from Mazars last week that did not demonstrate full openness. Furthermore, the exchange temporarily disabled withdrawals of the stablecoin USDC during a period of record withdrawals due to daily banking hour constraints.
Analysts and other market participants have previously complained that Mazars’ reports lacked a judgment or assurance conclusion regarding the reliability of their clients’ financial statements.
Binance’s global communications head, Dewi Mustajab, told Yahoo Finance, “Unfortunately, this means that we will not be able to work with Mazars for the moment.”
On June 16th, 2022, Binance CEO and founder Zhao Changpeng attended the Viva Technology innovation and startup conference at the Paris, France, Porte de Versailles exhibition complex.
Zhao Changpeng, founder and CEO of Binance, is in Paris, France, on June 16 for the Viva Technology innovation and startup conference at the Porte de Versailles exposition center.
After the accounting firm’s suspension was announced, Crypto.com issued the following statement: “We will continue to cooperate with competent audit businesses in 2023 and beyond, as we seek to encourage transparency across the whole sector.” Mazars, who were hired in November, completed the report, which was made public on December 7.
After Mazars published a proof of reserve report on the company’s reserves on December 8, a company official said KuCoin was “willing to engage with any known and competent auditor.”
As a result, Bitcoin dropped below $17,000, putting stress on the cryptocurrency markets. However, early this week, Bitcoin climbed above $18,000, marking its first time doing so since the FTX crisis.
During the three days of this week, Binance saw $6 billion in withdrawals, the largest withdrawal period for the exchange since 2020, according to data compiled by Binance and CryptoQuant. The volume of withdrawal requests the company received in 2020 and 2021, according to the data provided by CryptoQuant, overstretched its reserve ratio.
On Wednesday, Binance CEO Changpeng Zhao took to Twitter Spaces to address the market, calling the current situation a “stress test” but perhaps failing to soothe investors.
When asked if the company would be releasing more information “in the next couple of weeks,” CEO Zhao said, “Showing asset reserves is not as straightforward of an exercise as people believe.”
Next, Zhao detailed the absolute worst-case scenario for Binance. As long as “we fail honorably and legitimately,” he explained, investors have a chance to pull their money out of the company before it goes bankrupt, and that’s good with him.
Since FTX admitted to combining customer funds with those of its sibling hedge fund, Alameda Research, bitcoin exchanges have taken a cautious approach.
The business intends to liquidate four subsidiaries as part of its Chapter 11 strategy to reduce its $7 billion deficit, as the newly appointed CEO of FTX revealed in testimony before Congress on Tuesday.
Although research from the blockchain analytics platform CryptoQuant suggests that Binance’s financial situation is not as precarious as FTX’s, an actual financial audit is still necessary.
According to the report, CryptoQuant validated Mazars’ findings that all of Binance’s bitcoin assets are properly collateralized. Furthermore, the report stated that Binance has not engaged in any “FTX-like” behavior, which would indicate that no assets have been sent to addresses other than those associated with the exchange. Based on the findings of the research, Binance has a “clean reserve,” with “still a modest share of its assets” being its own proprietary coin, BNB.
According to our research, neither we nor the BSC, BNB, or BNB networks recommend or support Binance. That is to say, the fact that on-chain statistics back up the amount of BTC the Binance exchange claims to have as liabilities at the time the PoR report was issued is merely suggestive of the exchange’s dependability. CryptoQuant found these results and reported them.
