Mazars Group, known for its proof of reserve auditing services for crypto companies, has reportedly removed audits from its website.
Crypto exchange Binance has had its proof of reserve audits removed from auditor Mazars’ website.
The official Mazars website shows that they have completely abandoned Mazars Veritas, a section dedicated to cryptocurrency exchange audits. The tool was developed by Mazars to “bring trust and transparency to the digital asset industry” using the Silver Sixpence Merkle Tree Generating tool to complement proof of reserve reporting.
On December 16, Bloomberg also reported that Mazars had stopped conducting proof of reserve audits for cryptocurrency companies. Other accounting firms such as FTX auditor Armanino have also reportedly stopped working with crypto exchanges such as OKX and Gate.io.
Mazars is widely known as the accounting firm of former US President Donald Trump. The accounting firm was appointed as the official auditor for Binance’s proof of reserve updates in late November.
A number of competing crypto exchanges, including KuCoin and Crypto.com, have followed Binance’s lead by collaborating with Mazars as part of their reserve reports.
“Mazars has indicated that it will temporarily suspend work with all of its crypto clients globally, including Crypto.com, KuCoin, and Binance,” a Binance spokesperson told Cointelegraph. “Unfortunately, this means we cannot work with Mazars at this time,” the representative added.
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Binance has also approached several major accounting firms, including Big Four auditors, who “are not ready to undertake a PoR for a private crypto company at this time,” the representative noted. “We will continue with our plans to provide Merkle Tree PoR to our users to demonstrate that client assets exist on on-chain addresses controlled by Binance,” the company said.
Binance CEO Changpeng “CZ” Zhao quickly responded to the news on Twitter with a retweet from a random commenter. “To explain why an accounting firm decided to stop working with crypto? Ask him lol,” the tweet read.
CZ also took to Twitter to imply that blockchains are transparent by default, saying:
“Blockchains are public and permanent archives. It is the most auditable register.
The news comes shortly after Mazars confirmed on December 7 that Binance has control of 575,742 Bitcoins.
of its customers, valued at approximately $9.7 billion at the time of writing. The report has since also been removed from Mazars’ website.
See also: Members of the Crypto Community Discuss the Banking Race on Binance
Some financial specialists immediately saw red flags in Binance’s reserve report. A former member of the Financial Accounting Standards Board argued that the report published by Mazars lacked data on the quality of internal controls and how Binance’s systems liquidate assets to cover margin lending.
Mazars did not immediately respond to Cointelegraph’s request for comment.