Mazars, a global accounting firm, has declared a “suspension of transactions” with cryptocurrency exchanges such as Binance and Crypto.com.
Mazars has provided a report that these exchanges have sufficient customer funds as investor anxiety over the virtual currency market has grown due to the recent fall of FTX.
According to Bloomberg News on the 16th (local time), Mazars said, “We have suspended activities related to the creation of a ‘proof of reserve’ report in the virtual currency sector.”
Binance, the world’s largest cryptocurrency exchange, also said, “Mazar has hinted at a temporary suspension of work with cryptocurrency exchanges around the world, including Crypto.com, Cucoin, and Binance.”
Mazars explained that the reason for the suspension was “concerned about the way the Reserve Certificate Report is understood by the public.”
This report shows that the cryptocurrency exchange has the funds of its customers.
As concerns about the virtual currency market grew as FTX collapsed, exchanges have been trying to prove their financial soundness by writing the report to global accounting firms.
Binance released a report written by Mazars on the 7th and Crypto.com on the 9th, respectively, stressing that they have customer assets safely.
However, the report sparked a controversy over reliability. It is not through a formal audit, but only at the request of these exchanges.
In the case of the Binance report, the proof of reserves was limited to Bitcoin, and no debt appeared. There was also no Mazar’s opinion or conclusion on the figures in the report. Some pointed out that it means that Mazar does not guarantee this figure.
The suspension of Mazar’s “audit” put these exchanges on alert.
“We are working with other companies,” said Zhao Chang-feng, CEO of Binance. “Many accounting firms seem a little afraid to work with cryptocurrency companies.”
These media reported that the world’s four major accounting firms, Unst & Young, Deloitte, PricewaterhouseCoopers, and KPMG, have not made any moves yet.
