Binance Proof-of-Reserve auditor stopped all work with crypto clients – No reason to panic
- Mazars Group has stopped working with Binance, Crypto.com, and KuCoin.
- The crypto exchanges have all stated that they are already looking toward other globally acclaimed auditors.
Mazars Group, the accounting firm that conducted the audit of Binance’s proof-of-reserve, has discontinued its relationship with all its crypto clients. The move ends its work with Binance, KuCoin, and Crypto.com.
The accounting firm told CNBC that the move was prompted by the way its audit reports “are understood by the public.” It explained that proof of reserves reports are only performed following Reporting Standards relevant to an Agreed Upon Procedures report.
This means that the reports only convey limited findings based on the agreed procedure. They also do not constitute either an insurance or an audit opinion on the subject matter, Mazars added.
They [proof of reserve reports]do not constitute either an assurance or an audit opinion on subject matter. Instead they report limited findings based on the agreed procedures performed on the subject matter at a historical point in time,
Mazars has also deleted the five-page Binance proof-of-reserve report its South African branch published from its website. It has as well discontinued the webpage it created for users to verify Binance’s reserve.
Spokespersons from Binance, Crypto.com, and KuCoin have confirmed the development to CNBC. The Binance spokesperson stated that the exchange is already considering other accounting firms to continue its audits.
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The Crypto.com rep noted that Mazars had already “provided independent verification” of its secure on-chain digital assets matching customer balances 1:1. Meanwhile, the KuCoin statement noted that its proof-of-reserve report was already delivered by Mazars.
Binance encourages user confidence as withdrawals surge
Both Crypto.com and KuCoin, like Binance, reiterated that they are open to working with other globally recognized accounting firms. However, the move is a big blow to the crypto firms as it comes at a time when the industry is recovering from the aftershock of FTX’s collapse.
Meanwhile, Binance is still reassuring users that it is financially strong and there is no reason to panic. A spokesperson told the Guardian Binance has processed over $6 billion in withdrawals this week alone without breaking stride.
The person added that the feat has been a stress test for the exchange and should reassure users that their funds are safe. He also stated that Binance’s capital structure is debt free.
Despite the reassurance, the price of Binance’s BNB token has fallen dramatically recently. BNB dropped to a three months low price of $221.53, before recovering slightly. The token is currently trading at around $237.53, down 5.71 percent in the last 24 hours.