Is there a plot to bring Binance and crypto down?

Mainstream media has reported that the Binance Proof-of-Reserves audit was not actually an audit. Others have joined the fray. Binance fights back.

A recent report in the Wall Street Journal states that Binance is trying to calm investors but that its finances remain a mystery. Here, the mystery refers to the proof-of-reserves audit carried out by Mazars. 

Given that the WSJ printed such an article means that the ensuing FUD can prove to be quite difficult for Binance to bat away. Also, once such a mainstream platform publishes something like this, many other news platforms are likely to follow suit. CoinTelegraph, Investing.com, and Zero Hedge among others have already done so.

Proof-of-Reserves report

The issue appears to be that some experts have stated that the Proof-of-Reserves report carried out by Mazars isn’t actually an audit. The report was done using a methodology called “agreed upon procedure” (AUP). 

Some are saying that this is an issue because the AUP is how Binance wanted the report done rather than a full on audit where the auditor themselves decide how they are going to conduct the process.

The WSJ article highlighted a section of the report called “report details” where the actual amount of bitcoin held by Binance did not tally. While the “customer liability report balance” showed 597,602, the “asset balance report” showed 582,486 – a difference of about 3%.

Ex-CEO of Kraken joins the fray

Jesse Powell, ex-CEO of Kraken joined the fray when he tweeted that Binance had admitted to being “insolvent” as regards the “assets owed vs tokens controlled”. He accused Binance of using the same “collateral accounting trick” as FTX.

Binance Customer Support replied to Powell’s tweet saying that he hadn’t understood and that “more harm than good” could be done by the charge he had levelled. They continued:

To which Powell replied:

Binance Customer Support then tweeted the following with further clarifying tweets:

Get your funds off Binance?

Travis Kling, CIO of Ikigai Asset Management, recommended that investors get their funds off of Binance, saying that he didn’t have any hard evidence for saying so, but added that he didn’t have any hard evidence on FTX either before it went down.

He did say in his last tweet on the subject though that “I’m praying Binance passes with flying colours.”

Meanwhile, CZ of Binance continued to fight back against what he saw as FUD. He made a cryptic remark perhaps alleging that some of the mainstream media was being funded by someone he wasn’t prepared to name:

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: https://cryptodaily.co.uk/2022/12/is-there-a-plot-to-bring-binance-and-crypto-down