Proof-of-Reserve Auditor Mazars Pauses Work for Crypto Clients

Mazars the auditing firm that worked with Binance and various other crypto exchanges including KuCoin and Crypto.com has paused all its business with their crypto clients according to an emailed statement by Binance.

Mazars recently performed a proof-of-reserves assessment of Binance finding its Bitcoin reserves to be overcollateralized. Mazars has since removed the link to the report from its website. A spokesperson from Binance said:

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.

According to reports from Bloomberg, Mazar’s website shows that they fully discontinued Mazars Veritas – a section dedicated to crypto exchange audits. Mazars Veritas was developed by the firm to bring “trust and transparency to the digital asset sector,” and made use of the Silver Sixpence Merkle Tree Generating tool to complement proof-of-reserve reports. Bloomberg further reported that other auditing firms such as FTX’s auditor Armanino also halted their work with crypto exchanges such as OKX and Gate.io.

The auditor also found that KuCoin’s BTC, USDT, ETH, and USDC reserves were all overcollateralized, but has also removed this report since. The auditing firm did however find that Crypto.com’s reserves were fully backed at a ratio of 1:1.

Binance’s CEO Changpeng “CZ” Zhao quickly took to Twitter to react to the news by retweeting a random commenter’s statement. He also went on Twitter to hint that blockchains are transparent by default stating:

Blockchains are public, permanent records. It’s the most auditable ledger.

— CZ 🔶 Binance (@cz_binance) December 16, 2022

Mazars is also widely known as the accounting firm of former U.S. President Donal Trump’s company.

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.