Binance’s FUD increases as proof-of-reserves auditor Mazars Group suspends all work with crypto clients
Is another trouble brewing in crypto land? That’s the question everyone is asking after the global accounting firm Mazars Group suddenly suspended all work with its crypto clients including Binance, Crypto.com, and KuCoin. The decision to cut ties with these leading crypto companies comes just after Mazars Group released “proof of reserve” reports for several digital asset exchanges which it audited.
What’s so unusual about this story is that Binance was the first to share the news with media outlets. “Mazars, the auditing firm working with Binance and other crypto exchanges on proof-of-reserves statements, has paused all work for crypto clients,” Binance said in an emailed statement.
A spokesperson from Binance told CNBC in a statement that, “Mazars has indicated that they will temporarily pause their work with all of their crypto clients globally, which include Crypto.com, KuCoin, and Binance. Unfortunately, this means that we will not be able to work with Mazars for the moment.”
What’s also jarring is that the accounting firm also scrubs Binance’s proof-of-reserves assessment, which found its bitcoin reserves were overcollateralized, according to another report from Coindesk. Mazars has not responded to a request for comment.
As we reported on Monday, Crypto.com published audited proof of reserves certifying that customer assets were held on a one-to-one basis, meaning that all deposits are 100% backed by Crypto.com’s reserves. The audit was carried out by Mazars Group. But despite releasing the proof of reserves, that has not quelled the news from major news outlets that “Crypto.com CEO has a history of red flags including bankruptcy and quick exits.”
Meanwhile, the prices of bitcoin and Binance’s BNB token dipped on the news. Bitcoin initially dropped nearly 3% and Binance’s native token fell nearly 5.5%.
In response to Mazars Group’s decision, a spokesperson for Crypto.com said the company will “continue to engage with reputable audit firms in 2023 and beyond” as they “seek to increase transparency across the entire industry.”
Meanwhile, a KuoCoin spokesperson said that the company’s proof of reserve report was already delivered by Mazars. “In the future, we are open to work with any leading and reputable audit to provide the third-party verification report,” the spokesperson added.