Accounting firm that issued proof of reserves report for Binance halts service to all crypto clients

Mazars, the accounting firm that released a proof-of-reserves report released by cryptocurrency giant Binance last week, has removed the report from its website and no longer offers the service to its crypto clients.

Binance, the world’s largest crypto exchange, tweeted a link to the report on Dec. 7 as it seeks to reassure customers of its reservations following the collapse of competitor FTX last month.

Binance, the world’s largest crypto exchange, is struggling to find an accounting firm to perform a proof of reserves report. (Jakub Porzycki/NurPhoto via Getty Images/Getty Images)

According to the Wall Street Journal, Mazars removed the report from its site on Friday.

“Mazars has suspended its activity relating to the provision of proof of reserves reports for entities in the cryptocurrency industry due to concerns about how these reports are understood by the public,” the accounting group said in a statement. press release sent by e-mail to FOX Business.

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A Binance spokesperson said that Mazars “has indicated that it will temporarily suspend work with all of its crypto clients globally, including Crypto.com, KuCoin, and Binance. Unfortunately, this means we will not be able to work with Mazars. for the moment. .”

“Ultimately, our users want to know that their funds are safe and that our business is financially sound,” Binance’s statement continued. “To that end, Binance’s capital structure is debt-free, and over the past week, Binance has passed a stress test which should give the community tremendous comfort in the safety of its funds. Despite the large number of withdrawals from December 12 to 14, $6 billion in net withdrawals over three days, we were able to fill them without slowing down the pace.”

Binance said it contacted several major accounting firms, including the Big Four, seeking a loan to perform a proof of reserves report. The crypto exchange said the Big Four — which are Deloitte, Ernst & Young, KPMG, and Pricewaterhouse Coopers — are all “currently reluctant to conduct a PoR for a private crypto company.”

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The crypto industry has been rocked by the fall of FTX, leaving investors deeply concerned after a bank run showed the exchange – worth around $40 billion at one point – did not have enough reserves to honor the withdrawals. The company filed for bankruptcy last month, resulting in billions of dollars in losses for around one million customers worldwide.

Founder of FTX Sam Bankman Fried was arrested Monday on multiple charges related to the collapse of his business, prompting calls for stricter regulation of the crypto industry by jurisdictions around the world, including requiring proof of reserves.

Changpeng Zhao, CEO of Binance

Binance CEO Changpeng Zhao speaks during the Delta Summit, Malta’s official blockchain and digital innovation event promoting cryptocurrency, in St Julian’s, Malta on October 4, 2018. (REUTERS/Darrin Zammit Lupi/Reuters Photos)

Binance Founder and CEO Changpeng “CZ” Zhao told CNBC’s “Squawk Box” this week that “well-run crypto exchanges should hold user assets one by one.”

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“People can withdraw 100% of the assets they have on Binance,” Zhao said. “We won’t have a problem, on any given day.”

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