Mazars suspends Proof-of-Reserves work for crypto companies

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Mazars suspends Proof-of-Reserves work for crypto companies

It has been claimed that the international auditing, tax, and consultancy company Mazars has halted its work on proof-of-reserves projects with major cryptocurrency companies including , KuCoin, and Crypto.com.

A Mazar’s spokesperson stated 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.”

After the failure of , the CEO of Binance, CZ, made the announcement that the company will begin using proof-of-reserves in order to achieve “complete transparency.” He also made the suggestion that other cryptocurrency exchanges use Merkle-tree proof-of-reserves.

In order to provide users with transparency and satisfy regulatory requirements, some cryptocurrency exchanges, such as KuCoin and Crypto.com, have begun working with third-party auditing companies to publish their proof-of-reserves reports.

On the official website of the firm, you won’t be able to find any trace of the Mazars Veritas section that was once dedicated to auditing cryptocurrency exchanges. Proof-of-reserve reports were improved with the addition of the portion that was developed by the French company with the assistance of the Silver Sixpence Merkle Tree Generating tool.

This action taken by Mazars occurred immediately following the publication of the proof-of-reserves report by Binance. Due to the fact that Mazars’ report was not an exhaustive audit and had a number of deficiencies, Binance was subjected to a great deal of criticism after it.

A Binance spokesperson stated, “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.” 

The spokesperson added, “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.”

Following this, Binance CEO CZ shared the proof-of-reserves report from blockchain analytics firm CryptoQuant. The report notes that Binance’s ETH and Stablecoin reserves are not showing “FTX-like” behavior at this point.

“We found that Binance’s reported liabilities are very close to what we thought they would be (99%),” the CryptoQuant tweeted.

Compiled by Coinbold

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