Binance auditor withdraws from trading with cryptocurrency company | Binance
Binance, the world’s largest cryptocurrency exchange, has announced that its auditor, Mr. Mothers, has stopped trading.
The exchange, which was hit by $6 billion in withdrawals this week, said in a statement that its French audit firm had “temporarily” suspended work with all cryptocurrency customers, including Binance.
web page that links to Mazars’ work on Binance’s proof of reserve – Evidence that the client’s funds could be covered – was not available on Friday morning.
Mothers’ withdrawal continues FTX collapse last monthOne of Binance’s rivals, FTX founder Sam Bankman-Fried, was arrested on Monday. prosecuted in the United States For allegations of fraud, money laundering and conspiracy.
Binance customers have been scrambling to withdraw funds from the exchange, with a spokesperson revealing that they have returned a total of $6 billion this Monday, Tuesday and Wednesday.
A Binance spokesperson said Binance managed withdrawals “without breaking its stride,” but on Tuesday the exchange suspended withdrawals of the stablecoin USDC after depleting assets in its reserves. But efforts to stem the bank run are working, he said.
“Ultimately, users want to know that their funds are safe and that our business is financially sound,” said the spokesperson.
“To that end, Binance’s capital structure is debt-free, and over the past week, Binance should have passed the stress test, giving the community an extraordinary sense of security that their funds are safe. Despite the massive withdrawals on the 14th, we had $6 billion in net withdrawals over the three days, but we were able to make good progress.”
Binance said in a statement that Mazars has also suspended trading with other cryptocurrency clients. We reached out to Mazars for comment.
Mazars had worked with Binance, but the company fell short of conducting a full audit of the exchange. Instead, the document produced by Mazars, known as the ‘reserve report’, was prepared using a method known as the ‘agreed procedure’.
In the case of Binance, that meant examining the company’s reserves, but not its debt claims. Binance CEO Changpeng Zhao The company says it has no loans.
A Binance spokesperson added that the exchange has “reached out to multiple large companies,” including the “Big Four” accounting group, but they are “currently unable to hold private crypto company reserves. “We are still looking for companies that do,” the spokesperson added.
Crypto companies regularly fall short of full audits. tether, Controversial Stablecoin Provider Stated to have over $70 billion in reserves backing cryptocurrencies, prepared quarterly “reserve statements” and sometimes presented as an audit, with snapshots showing assets in reserves The company touts cooperation with BDO, a “Big 5” audit firm that is not part of the traditional accounting “Big 4”.
On Thursday, it was reported that auditing firm Armanino, a medium-sized American auditor, will end its cryptocurrency auditing operations once and for all after approving the accounts of FTX’s supposedly ring-fenced American subsidiary.
Auditors fear the resulting reputational risk could harm non-crypto businesses. According to Forbes, it was cited in a class action lawsuit against the closed exchange filed by FTX customers who claimed to have lost $20,000. reported its decision to exit the crypto business.
https://www.theguardian.com/business/2022/dec/16/binance-auditor-mazars-withdraws-from-working-with-cryptocurrency-exchange Binance auditor withdraws from trading with cryptocurrency company | Binance