International auditing company Mazars have taken down the website that housed proofs-of-reserves work for bitcoin exchanges. According to the company’s statement, it will no longer collaborate with crypto firms on proof-of-reserves reports going ahead.
Since it began producing these studies for cryptocurrency exchanges, Mazars has made several appearances in bitcoin headlines during the past several weeks. After the demise of FTX, businesses are supposed to comfort their users. For consumers to verify that their crypto assets are included in the report by submitting a hash, Mazars additionally utilized Merkle trees.
Crypto.com and Kucoin are a couple of the audit firm’s customers. Binance, however, was the most well-known customer. Last week, Mazars confirmed that as of November 22 at 5:29 am, Binance has enough bitcoins and wrapped bitcoins to cover all customer balances on the exchange.
Binance and Mazars released the proof-of-reserves report for the exchange’s bitcoin reserves. However, many individuals immediately pointed out that this report only covered a tiny percentage of Binance’s activity.
Although it may be considered a move in the right way, it has no impact on how Binance manages all crypto assets across all of its offerings. Similarly, it is difficult to determine whether user assets are correctly segregated from Binance’s financial sheet.
Accounting Firm Mazars Stops Proof-of-Reserve Audits for Crypto Firms
It’s hard to declare with absolute assurance that Binance now stores user accounts in separate crypto wallets without market exposure as long as Binance withholds all relevant information.
The move by Mazars does not prove that the reports were inaccurate. It simply indicates that the audit company does not believe that the risk of dealing with crypto businesses for these reports is worthwhile. People have been paying close attention to these stories, so if one of those deals fails in any manner, Mazars is risking its image.
Building trust takes much work, and after FTX’s demise, these auditing reports came out a little too fast. They were a positive move, but additional research will be needed to demonstrate the security of user assets.
The news comes after Jesse Powell of Kraken recently criticized the Binance POR reviewed by Mazars on December 8 and November 25. The POR of Binance has been in the news for a while, and the business has had to deal with much conjecture, speculations, and FUD. Additionally, on December 13, Binance saw substantial withdrawals as more than $3 billion in money was taken out of the exchange.
Although Mazars does not provide POR audits for cryptocurrency exchanges, the business appears to have taken Binance’s POR offline for the time being. When someone tries to access the Mazars-published Binance audit, the page suddenly states that the “server cannot be located.” The audit from Crypto.com is still available online as of this writing and has not been taken down.
