Investing.com — Cryptocurrency prices, including Bitcoin, fell on Friday after new developments cast fresh doubt on the reliability of reserve figures provided by the world’s largest exchange.
According to Bloomberg, Binance earlier said that audit and tax firm Mazars, which issued a controversial attestation on Binance’s reserves last week, has now halted all work with the cryptocurrency industry. Among its other clients are KuCoin and Crypto.com, the exchange promoted in particular by Hollywood star Matt Damon.
“Mazars has indicated that they will temporarily halt work with all of their crypto clients globally,” Bloomberg quoted a Binance spokesperson as saying. “Unfortunately, this means that we will not be able to work with Mazars at this time.”
The news removes one of the main supports for Binance Founder and CEO Changpeng Zhao’s repeated claims that the exchange is properly handling customer deposits – a concern within the crypto community that has flared up since the news. collapse of rival stock exchange FTX in November. FTX misappropriated more than $8 billion in client funds to cover the losses of an affiliated hedge fund, Alameda Research, according to US fraud charges uncovered this week.
The link to the attestation provided by Mazars has been disabled on the Binance site.
Mazars said at the time that data provided to him by Binance indicated that the exchange’s available reserves exceeded its commitments to customers, validating repeated claims by Binance CEO and Founder Changpeng Zhao. However, it had added significant reservations to its assessment, noting that it had worked within specific restrictions imposed by the exchange and that it had not been able to verify all data with third parties. As such, the attestation could not be considered an audit, which typically involves confirming company data on matters such as custodial agreements with relevant third parties.
While it’s hard to see a bright spot for the crypto in any sense, some noted that Mazars’ stock still left a lot of room for doubt as to Binance’s actual strength.
In a social media thread retweeted by Zhao, Jeff Dorman, chief investment officer of digital asset platform Arca, said that Binance was trapped in a “guilty until proven guilty” environment, adding that “it is virtually impossible for Binance (or any other exchange) to prove its innocence in a timely manner.”
Dorman argued that auditors’ susceptibility to reputational damage has been high since the Enron collapse effectively killed Arthur Andersen, one of the world’s largest auditing firms, 20 years ago.
“If your baseline assumption is ‘no audit = bad actor’, you might consider ‘no audit = auditors are afraid to be wrong,'” Dorman said.
As of 5:55 a.m. ET (10:55 a.m. GMT), was down 3.6% at $17,065, reversing all of its gains for the week. was down 6.0% at $1,209.37.
By Geoffrey Smith