Since FTX went down, there has been a lot of public interest in how financially stable crypto exchanges are. As exchanges publish their proof-of-reserves (PoR) to reassure investors, the community has raised some “red flags” about the reliability of these reports.
Mazars, a multinational accounting firm that Binance hired to do their PoR report, has now said that they will temporarily stop all accounting services for crypto exchanges.
Related:Â A data firm says that $1.9 billion was taken out of Binance in 24 hours.
Mazars has said that they will stop working with all of their crypto clients around the world for a while. This includes Crypto.com, KuCoin, and Binance. “We’re sorry to say that this means we can’t work with Mazars right now,” Binance said in a statement on Friday. This is true, according to a Mazars representative.
Binance is still working to gain investors’ trust, and the CEO is tweeting more than ever:
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The difference between @cz binance and @SBF FTX is that when @binance lost $5 billion in a week, nothing happened, and CZ said it was “business as usual” and that it was their money to do whatever they wanted with.Do you remember what happened to @FTX_Official? Just a friendly reminder — Tom (@5TomBorn) on December 16, 2022
The CEO of Binance says on Twitter that the large number of withdrawals did not bother him.
In a statement released on Friday, Binance said that they had asked several large firms, including the “Big Four,” to do a PoR report for them, but none of them were willing to do so.
Even though there is no timetable for more PoR clarity, Binance said:
“We want more openness, and we’re looking into the best way to give more information in the coming months.” Auditors and investors are both wise to be cautious after seeing the many effects of the FTX crash. Auditors have trouble doing full audits, and investors have moved quickly to protect their money from problems that could happen with Binance.
On the other hand, the community gave Binance a “stress test” about the large number of withdrawals from the platform, and it did well. More and more evidence shows that Binance holds all of their customers’ funds 1:1 and that they are not likely to go bankrupt like FTX did.
Related: Colin Wu Responds to Binance’s POR Audit Notification
Why Should You Be Concerned?
If Binance went down, it would do a lot of damage to the crypto industry and probably set us back many years. As the biggest and most trusted cryptocurrency exchange, it is very important for the industry that they stay in business. Time will tell, but it looks like Binance is making all the right choices, and they are more open than most crypto exchanges.
