Global audit corporation Mazars has withdrawn its services from all companies in the crypto sector. Mazars’ withdrawal comes barely two weeks after its public audit of the Binance exchange.
Mazars’ Exchange Auditing Tool Shut Down
Per the release, a Binance spokesperson confirmed the news of Mazars’ latest move in a statement on Friday. Going forward, the accounting firm will not conduct business with crypto customers in the US or anywhere in the world. Naturally, the reportedly temporary pause extends to platforms Crypto.com, KuCoin, and of course, Binance.
Mazars meanwhile has declined to comment on the situation just yet. However, the auditor’s official website already reflects changes in line with their decision. Mazars has rendered its exchange auditing division, Mazars Veritas, obsolete.
The accounting firm launched Mazars Veritas intending to bring trust and transparency to the virtual asset industry. To do so, Mazars utilized the Silver Sixpence Merkle Tree Generating tool to enhance proof-of-reserve reports. The past few weeks have seen exchange firms scramble to publish proof of reserves as user anxiety rose due to the FTX debacle.
Mazars Withdraws Binance PoR Report
Formerly at the forefront of the industry, crypto exchange FTX filed for bankruptcy last month. At the moment, founder ex-CEO Sam Bankman-Fried is in the custody of Bahamian law enforcement. SBF is also facing prosecution by the SEC on accusations of wire fraud and various others.
Understandably, all of these events have contributed to increasing demands from crypto consumers’ for transparency. As such, Mazars conducted a series of proof-of-reserves assessments in the past month. Its Binance report revealed that the Changpeng Zhao-led firm had over-collateralized its BTC holdings.
Kucoin had also overcollateralized its BTC reserves as well as its ETH, USDT, and USDC reserves. Crypto.com assets on the other hand were fully backed in a one-to-one ratio. Interestingly, however, Binance’s assessment which the firm conducted earlier this month is no longer available.
The link to the Binance PoR report is now inactive and the same is true for the KuCoin and Crypto.com reports.
Binance Still Finding a Replacement
Mazars is not the only company to withdraw support for crypto clients.
FTX auditor Armanino reportedly canceled its crypto audit services, cutting ties with firms OKX and Gate.io. Notably, Armanino’s decision may have come due to the big hit to its reputation after FTX shut down. Indeed, the auditor is facing a class-action lawsuit for failing to bring FTX’s issues to light.
The Binance representative reportedly also revealed that the exchange has contacted several large auditors. One such firm was Big Four auditors who stated that they would rather not conduct a PoR for a private crypto platform. Binance is apparently still set on providing users with a Merkle Tree PoR report. The exchange aims to prove that user assets are fully under control.
Binance’s native BNB token dropped on the news, shedding about 5% of its value in the past day. KuCoin and Crypto.com were once more parties to the decline with KCS falling by 2.5% and CRO by 3.9%.