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Auditing firm Mazars Group has dropped cryptocurrency firms as clients, according to crypto exchange Binance.
In a statement to Decrypt, Binance said that “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,” a Binance spokesperson said, adding that the exchange is looking to “embrace additional transparency, exploring the best ways to share those details “in the coming months.”
The firm will also be moving forward with its Merkle Tree-based proof of reserves (PoR) pilot.
As for working with another accounting firm, the spokesperson said that "we have reached out to multiple large firms, including the Big Four, who are currently unwilling to conduct a PoR for a private crypto company and we are still looking for a firm who will do so."
Binance Coin (BNB), the native token of the exchange, responded to the news with a 5.2% drop on Friday, currently trading around $251, according to CoinGecko.
A Crypto.com spokesperson told Decrypt that the exchange completed its proof-or-reserves attestation with Mazars "successfully."
KuCoin did not respond to Decrypt's request for comment.
Mazars' reports pulled off
Last week, Mazars published a proof-of-reserves assessment of Binance, reporting a 101% collateralization ratio for 575,742 Bitcoin in net customer deposits as of November 22. The link to the report on the French firm’s website, however, is no longer working at press time.
Mazars also performed a proof-of-reserves assessment of Kucoin and Crypto.com exchanges, finding that BTC, ETH, USDT, and USDC reserves at Kucoin were overcollateralized as well, while Crypto.com had a 1:1 backing of its reserves.
Both reports have been pulled off the firm’s website as well.
A Mazars spokesperson told Decrypt that it "has paused its activity relating to the provision of Proof of Reserves Reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public."
The financial health of crypto exchanges came under scrutiny following the collapse of FTX in November, with many trading platforms moving to conduct proof of reserves reports for the likes of Binance and other large exchanges.
Binance’s proof of reserves report has faced hefty criticism, as it was not a full or official audit. It also referred to a snapshot of the exchange’s assets at a certain point of time and did not disclose its liabilities.