Accounting Firm That Issued Proof-of-Reserves Report For Binance Halts Service To All Crypto Clients
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Mazars, the accounting firm that issued a proof of reserves report published 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 cryptocurrency exchange, tweeted a link to the report on Dec. 7, as it seeks to reassure clients about their bookings following the collapse of competitor FTX last month.
Binance, the world’s largest cryptocurrency exchange, is having a hard time finding an accounting firm to do 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 halted its activity related to the provision of Proof of Reserves Reports to entities in the cryptocurrency sector due to concerns about how these reports are understood by the public,” the accounting group said in an emailed statement. mail to fox business.
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A Binance spokesperson said that Mazars “has indicated that it will temporarily halt work with all of its crypto clients globally, which includes Crypto.com, KuCoin and Binance. Unfortunately, this means that we will not be able to work with Mazars for the time being.”
“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 extraordinary peace of mind that their funds are safe. Despite the large amount withdrawals December 12-14, $6B net withdrawals over three days, we were able to deliver without missing a beat.”
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Binance said it has reached out to several major accounting firms, including the Big Four, looking for one that is willing to do a proof of reserves report. The crypto exchange said that the Big Four, which are Deloitte, Ernst & Young, KPMG and Pricewaterhouse Coopers, “are not currently willing to perform a PoR for a private crypto company.”
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The crypto industry has been rocked by the fall of FTX, leaving investors on high jitters after a bank run showed the exchange, worth roughly $40 billion at one point, it did not have enough reserves to honor the withdrawals. The company filed for bankruptcy last month, resulting in billions of dollars in losses for approximately one million customers around the world.
founder of FTX Sam Bankman-fried was arrested Monday on various charges related to the collapse of his company, prompting calls for increased regulation of the cryptocurrency industry from jurisdictions around the world, including requiring proof of reserves.
Binance CEO Changpeng Zhao speaks at 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-managed crypto exchanges should hold user assets one-to-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.”