The accounting firm Mazars was one of the only firms in the world that agreed to audit some of the largest crypto companies in the world, among its clients are Binance and Crypto.com. According to the Washington Journal, the firm decided to stop its services to those companies, this after a wave of claims against the reliability and quality of the audit and the growing suspicions of the collapse of stock exchanges, following the FTX. A large part of the claims against the firm pertains to the “proof of reserves” process that Binance asked the firm to perform for it.
The collapse of the FTX exchange left many crypto investors with the fear that the exchange they use will collapse as well, which led the world’s largest exchange – Binance, to take a step that would prove to its customers and the rest of the crypto world, that it does hold the assets that will back up its obligations to its customers (the cryptocurrencies their). Mazars agreed to carry out the inspection, and in the end issued a report according to which Binance has a backup (reserves) of 101% in relation to its obligations to its customers.
The report provided by the ministry raised many questions, especially after it was clarified that it was a specific test and not a full accounting audit, and in addition the ministry said that it did not guarantee the results of the report. The office produced the report for two other large and important clients in the crypto world – Crypto.com and KuCoin. So far, Mezers has not published a response on the issue, but Binance was the one that confirmed the report. Binance claims that it tried to contact the four largest accounting firms in the world, none of which agreed at all to approach the crypto exchanges in a professional sense.
The escape of the accounting office from working with crypto companies raises many concerns, and not for nothing. According to tests, two days ago sums of an enormous amount of 6.5 billion dollars were withdrawn from Binance and now together with the report of the cessation of activities of Mazers, it seems that the transparency with the crypto companies is at a low point and not good at all – Bitcoin is now falling after the report back to below the price of 17 thousand dollar, Ethereum loses 6% and falls below the price of 1,200 dollars and the currency of the Binance exchange – BNB, loses 6.7% and reaches the price of 243 dollars.
Without proper audit there is no transparency, and without transparency investors have no confidence in the exchanges that hold their currencies. We saw this problem very clearly in the case of FTX – according to the new CEO of the company, who was heavily involved in the bankruptcy process of the giant Enron, the company really had no records, a lot of information was lost and there was a serious oversight. Recall that FTX was a stock exchange The third largest crypto in the world, it has been heavily involved with the regulatory bodies in the US and according to some reports it was involved in the promotion of legislation that would make it a monopoly in the US.
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FTX had a great reputation, many connections and a CEO who met with presidents of the USA and donates millions of dollars to parties, if such a company is run in such a disgraceful way, how can investors trust any other exchange, let alone one that is managed in the East and without supervision (binance)?
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