Global audit firm Mazars has taken down the website hosting the cryptocurrency exchange’s backup testing job. The company told Bloomberg that it is suspending its work with cryptocurrency companies for future reserve test reports.
Mazars has appeared in crypto news several times in recent weeks as it started issuing such reports to cryptocurrency exchanges. The idea is that exchanges can reassure their users after the FTX crash. Mazars also used Merkle trees to allow users to verify that their cryptocurrency was included in the report by entering a hash.
Clients of the accounting firm include Crypto.com and Kucoin. But the most prominent client was Binance. Mazars confirmed last week that Binance has and is packing enough bitcoins to cover all users’ balances on the exchange as of November 22 at 23:59 UTC.
But when Binance and Mazars announced the Proof of Reserves report for the exchange’s Bitcoin reserves, many people were quick to point out that this report only covered a small portion of Binance’s business.
It can be seen as a step in the right direction, but it doesn’t mean much when it comes to Binance’s handling of all crypto assets across all of its products. Likewise, it is difficult to discern whether users’ assets are properly segregated from Binance’s own balance sheet.
Until Binance shares the full picture, it is impossible to say with 100% certainty that Binance currently has user accounts in segregated crypto wallets with no market exposure.
Mazars’ move doesn’t mean the reports were wrong. It simply means that the accounting firm does not consider it risky to partner with crypto firms for these reports. These messages have been closely monitored, putting Mazars’ reputation on the line if any of these exchanges fail in any way.
Building trust takes a lot of effort and these audit reports came out very quickly after the collapse of FTX. While they were a step in the right direction, proving that user resources are safe requires a more thorough approach.
Source: La Neta Neta
Jason Jack is an experienced technology journalist and author at The Nation View. With a background in computer science and engineering, he has a deep understanding of the latest technology trends and developments. He writes about a wide range of technology topics, including artificial intelligence, machine learning, software development, and cybersecurity.
