Following billions of dollars being withdrawn this week, Mazars has removed the Binance report from its website. The accounting firm Mazars, which provided Binance, the largest cryptocurrency exchange, with a proof of reserves report last week, has removed the report from its website and no longer provides the service to its crypto clients.
On December 7, Binance, the largest cryptocurrency exchange in the world, tweeted a link to the report to reassure customers about its reserves following the collapse of rival FTX last month.
The Wall Street Journal reports that Mazars removed the report from its website on Friday.
In an email to FOX Business, the accounting firm stated, “Mazars has paused its activity relating to the provision of Proof of Reserves Reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public.”
A Binance representative said Mazars “has shown that they will briefly stop their work with all of their crypto clients universally, which incorporate Crypto.com, KuCoin and Binance. We will not be able to collaborate with Mazars for the time being as a result of this, regrettably.”
The statement continued, “Ultimately, our users want to know that their funds are secure and that our business is financially strong.” As a result, Binance’s capital structure is debt-free, and the company recently passed a stress test, which should give the community a great deal of peace of mind regarding the safety of their funds. We were able to fulfill them without stuttering despite the large number of withdrawals from 12 to 14 December, totaling $6 billion in net withdrawals over three days.”
Binance claimed that it had contacted a number of prominent accounting firms, including the Big Four, in search of one that would be willing to conduct a proof of reserves report. According to the crypto exchange, the “Big Four,” which include PricewaterhouseCoopers, Deloitte, Ernst & Young, and KPMG, “are currently unwilling to conduct a PoR for a private crypto company.”
After a bank run revealed that the exchange, which was worth approximately $40 billion at one point, did not have sufficient reserves to honor the withdrawals, the collapse of FTX has rocked the cryptocurrency industry, leaving investors with significant anxiety. One million customers around the world lost billions of dollars as a result of the company’s bankruptcy filing last month.
On Monday, the founder of FTX, Sam Bankman-Fried, was arrested on a number of charges related to his company’s demise. This sparked calls for more regulations for the cryptocurrency industry, including the requirement of proof of reserves.
Changpeng “CZ” Zhao, the CEO and founder of Binance, stated this week on CNBC’s “Squawk Box” that “the well-run crypto exchanges should hold users’ assets one-to-one.”
Zhao stated, “People can withdraw all of their Binance assets.” There will never be a problem for us.
French bookkeeping firm Mazars is stopping all its work with crypto firms including, Crypto.com, KuCoin, and Binance, as per a representative for Binance.
Since then, all crypto reports have been removed from Mazars’ website.
“Past its activity relating to the provision of Proof of Reserves Reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public,” a Mazars spokesperson stated in a statement to Yahoo Finance.
Mazars remarked: Reporting Standards applicable to an Agreed Upon Procedures report are followed when completing Proof of Reserves reports. They are neither an assurance nor an audit opinion regarding the subject matter. Instead, they report a limited set of findings based on agreed-upon procedures that were carried out on the subject at a particular historical moment.
Bloomberg was the first to report Mazars’ decision. After the collapse of FTX, customers and investors are looking for greater transparency regarding the cryptocurrency exchanges they use, which is why Mazars has pulled out of the crypto market.
After receiving a report from Mazars last week that did not demonstrate complete transparency, investors have focused their attention on Binance, the largest cryptocurrency exchange. During a record number of withdrawals, the exchange also temporarily halted USDC withdrawals due to daily banking hour restrictions.
Mazars’ reports had previously been criticized by analysts and other market participants due to the accounting firm’s refusal to provide an opinion on the veracity of their clients’ financial information or an assurance conclusion.
Dewi Mustajab, Binance’s global communications lead, told Yahoo Finance, “Unfortunately, this means that we will not be able to work with Mazars for the moment.”
The accounting firm’s decision to pause was not addressed by Crypto.com, which hired Mazars in November and published its report on December 7. However, the company stated: In an effort to improve industry transparency, we will continue to work with reputable auditing firms into 2023 and beyond.
According to a spokesperson, KuCoin, which had a proof of reserve report published on December 8 by Mazars, also stated that it is “open to work with any leading and reputable auditor.”
Cryptocurrency markets were generally under pressure following this news, with bitcoin falling below $17,000; This week, for the first time since FTX’s demise, bitcoin traded above $18,000.
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According to a spokesperson for Binance, the French accounting firm Mazars is suspending all of its work with crypto firms, including Crypto.com, KuCoin, and Binance.
Since then, all crypto reports have been removed from Mazars’ website.
“Past its activity relating to the provision of Proof of Reserves Reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public,” a Mazars spokesperson stated in a statement to Yahoo Finance.
Mazars remarked: Reporting Standards applicable to an Agreed Upon Procedures report are followed when completing Proof of Reserves reports. They are neither an assurance nor an audit opinion regarding the subject matter. Rather they report restricted discoveries in view of the concurred methods performed on the topic at a verifiable moment.”
Bloomberg was the first to report Mazars’ decision. After the collapse of FTX, customers and investors are looking for greater transparency regarding the cryptocurrency exchanges they use, which is why Mazars has pulled out of the crypto market.
After receiving a report from Mazars last week that did not demonstrate complete transparency, investors have focused their attention on Binance, the largest cryptocurrency exchange. During a record number of withdrawals, the exchange also temporarily halted USDC withdrawals due to daily banking hour restrictions.
Experts and other market members had condemned reports by Mazars already, as the bookkeeping firm wouldn’t express a viewpoint on the legitimacy of their clients’ monetary data or a confirmation end.
“Sadly, this implies that we can not work with Mazars for the occasion,” Dewi Mustajab, a worldwide interchanges lead for Binance, imparted to Hurray Money.
Binance’s founder and chief executive officer, Zhao Changpeng, will attend the Viva Technology conference on innovation and startups on June 16, 2022, at the Porte de Versailles exhibition center in Paris, France. The founder and chief executive officer of Binance, Zhao Changpeng, attends the Viva Technology conference on innovation and startups on June 16, 2022, at the Porte de Versailles exhibition center in Paris, France. According to REUTERS/Benoit Tessier Crypto.com, which hired Mazars in November and published its report on December 7, the accounting firm’s decision to pause could not be discussed, but the following was stated: In an effort to improve industry transparency, we will continue to work with reputable auditing firms into 2023 and beyond.
According to a spokesperson, KuCoin, which had a proof of reserve report published on December 8 by Mazars, also stated that it is “open to work with any leading and reputable auditor.”
Cryptocurrency markets were generally under pressure following this news, with bitcoin falling below $17,000; This week, for the first time since FTX’s demise, bitcoin traded above $18,000.
View quote details for Bitcoin USD (BTC-USD) CCC – CoinMarketCap (USD) 16,725.24-692.68 (-3.98%) as of 1:19 AM UTC. Market open.
Add to watchlist 1D5D1M6MYTD1Y5YMaxFull screen According to Binance and CryptoQuant data, between Monday and Wednesday, Binance saw its largest customer withdrawal period since 2020, totaling $6 billion. However, according to CryptoQuant data, the company has withstood larger waves of withdrawals in 2021 and 2020 in comparison to its ratio of reserves.
Changpeng Zhao, Binance’s CEO, spoke on Twitter Spaces on Wednesday and referred to the current situation as a “stress test,” despite perhaps not providing investors with the assurance they required.
Zhao stated that the company will release additional information “in the next couple of weeks” and that proving asset reserves “is not as simple of an exercise as people think”
Zhao went on to describe the worst-case scenario for Binance. He stated, “It’s fine as long as we fail honestly and honorably and allow people to withdraw their funds because the company ran out of money.”
Since FTX’s admission that it mixed customer funds with those of its sibling hedge fund, Alameda Research, crypto exchanges have become more defensive.
According to reports, FTX’s new management wants to sell four parts of its business in Chapter 11 to pay back what its new CEO said was a hole of more than $7 billion during Congressional testimony on Tuesday.
According to a report produced by the blockchain analytics platform CryptoQuant, Binance’s financial situation is, at the very least, not as precarious as that of FTX.
As per the report, CryptoQuant had the option to check Mazars’ report, showing Binance’s bitcoin possessions are completely collateralized. Additionally, it stated that the company was not acting “FTX-like,” implying that its assets had not been moved to wallets other than Binance. The findings also state that Binance has a “clean reserve,” which means that its proprietary token BNB makes up “still a low proportion of its assets.”
“Our analysis should not be taken as a recommendation of Binance as a business, the BSC/BNB network ecosystem, or the BNB token. According to CryptoQuant’s report, “it is merely a sign that the amount of BTC Binance exchange says it holds as liabilities at the time the PoR report was conducted makes sense, according to on-chain data.”
