Accounting agency Mazars Group, which was hired by crypto behemoth Binance Holdings Ltd. and other prominent participants in the market to attest for their reserves, has ceased all work with crypto clients, inflicting a huge blow to an industry trying to restore faith in the aftermath of the FTX crash.
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.
Binance spokesperson said to Bloomberg News
According to an email from the company that was reviewed by Bloomberg News, the French company decided to cease its cooperation with cryptocurrency companies since there were signs that markets were not comforted by the “proof-of-reserves” reports that it has produced up to this point. According to the email, the company was also worried about the heavy attention from the media.
After the collapse of cryptocurrency exchange FTX, which was suspected of abusing user funds, the sector has been working to regain the trust of investors. Given that FTX had hired auditors previous to its collapse and that they seemed to have missed any warning indications, auditors have come under similar scrutiny in recent weeks. Bitcoin was down as much as 2.7% in early Europe trade following the story. Binance Coin (BNB), the platform’s native asset, dropped as much as 4.5 percent.
Mazars, a French accounting firm, has been working closely with major cryptocurrency exchanges including Binance, Crypto.com, and Kucoin to provide proof-of-reserves reports. A representative for Crypto.com claimed the company will “work with respectable audit companies in 2023,” while Kucoin did not immediately react to a request for comment. Reports for crypto customers that were previously available on a website maintained by Mazars have been disabled.
The action taken by Mazars does not prove that the reports were false. It simply indicates the auditing company does not see value in taking any chances by collaborating with crypto companies to produce these reports. The public has paid close attention to these stories, putting Mazars’ credibility at risk should any of the reported exchanges fall through. It takes time and work to build confidence, and these auditing reports came out a little too soon after the FTX crash. While they were a positive development, more work has to be done to ensure the security of user assets.
