Another Audit Firm Halts Proof-of-Reserves Service for Crypto Exchanges
Paris-based audit firm Mazars is reportedly halting all work with cryptocurrency firms, Bloomberg reported Friday. The move comes just a day after another auditor, Armanino, also stopped crypto audit practice. Additionally, the recently published proof-of-reserves reports for exchanges like Binance have been removed the website of the auditors.
Binance, Crypto.com, and KuCoin Auditor to Stop Working With Crypto Clients
Mazars, the audit firm that prepared proof-of-reserves (POR) reports for crypto exchanges, is halting all work for crypto clients, according to a statement by Binance. Mazars worked with several major crypto bourses including Binance, Crypto.com, and KuCoin.
“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.”
Mazars to Pause All Work for Crypto Clients, Binance Says
The move comes just a day after another accounting firm, Armanino, was reportedly terminating crypto audit practice and dropping certain clients, according to Forbes. The report stated that Armanino’s decision could be due to pressure from the firm’s non-crypto clients, citing reputational risks.
Armanino, which was in charge of FTX.US and Nexo’s POR reports, was sued in a class-action lawsuit filed in November, which alleged the audit firm failed to take notice of irregularities at FTX.US after carrying out its audit in 2021. Others named in the lawsuit included FTX CEO Sam Bankman-Fried, and Prager Matis, as well as FTX co-founder Gary Wang and Alameda Research former CEO Caroline Ellison.
The suit also accused Armanino of failing to fulfill its obligations to make sure FTX was not taking part in illegal activities. Plaintiff Stephen Pierce, who filed the lawsuit on behalf of himself and other affected investors, said Aramnino was “wilfully blind” to FTX’s scheme. Pierce lost around $20,000 in the FTX debacle.
Binance’s Reserves Report Removed from Mazars’ Website
Mazars’ decision to halt collaboration with crypto clients comes a week after the audit firm published a Binance’s POR report. The POR statement showed that Binance’s bitcoin reserves were overcollateralized. However, regardless of the report, there were massive withdrawals at the world’s biggest crypto exchange as investors remained weary of centralized exchanges.
The French auditor has been leading the crypto sector’s rush to prepare POR reports for major crypto exchanges in the wake of FTX’s implosion last month. Since then, crypto bourses have been under pressure to provide more insight into their reserves as billions of dollars of investors’ funds were lost as the FTX contagion spread.
This article originally appeared on The Tokenist
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Source: Read Full Article