Binance auditor Mazars halts all work with crypto exchanges

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Mazars Suspends Crypto Audits

Mazars Group, a French auditing firm that recently provided confirmation of proof of reserves for a number of cryptocurrency exchanges, has reportedly suspended all co-operation with such platforms globally.

According to a Bloomberg News report on Friday, the auditing firm has discontinued all its activities with leading crypto exchange Binance. Other global crypto firms not able to call on the auditor’s services are Crypto.com and KuCoin, the report noted.

Crypto journalist Colin Wu noted that Mazars’ move comes as exchanges faced criticism for labeling the Paris-based firm’s ‘agreed-upon procedures (AUP) as an audit. Another firm, Armanino, is also reportedly taking a similar step.

Blockchain is ‘the most auditable ledger’

The crypto industry is firmly in the spotlight following FTX’s implosion, with crypto exchanges rushing to prove they have their customers’ funds intact. This is after FTX founder Sam Bankman-Fried, who was arrested earlier this week and faces a long prison sentence, used customer funds to try and prop up his other failing business Alameda Research.

But proof of reserves reports haven’t fully convinced a large section of the crypto community, leading to massive withdrawals as customers become even more frazzled by what’s happened. Observers have pointed out that proof of reserves do not offer the real picture for exchanges as they do not account for liabilities.

Criticism that exchanges were mislabeling the reports as audits fueled a sort of ‘bank run’ on Binance this week. Indeed, the crypto powerhouse faced over $3 billion in withdrawals in 24 hours this week, with CEO Changpeng Zhao maintaining that the company had healthy financial records.

In an interview with CNBC’s ‘Squawk Box’ on Thursday, the Binance chief noted that if exchanges hold user funds as is expected, even a 100% withdrawal would not be an issue. He suggested Binance is in such a strong position.

“The well run crypto exchanges should hold user assets one to one. People can withdraw 100% of the assets they have on Binance. We will not have an issue.”

After the latest news about Mazars, Zhao took to twitter to drive that point further, noting that blockchain is transparent, permanent and “the most auditable ledger.”

The post Binance auditor Mazars halts all work with crypto exchanges appeared first on Invezz.

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