Mazars will suspend all exchange proof-of-reserves reports
Mazars, according to a Binance representative, has ceased dealing with cryptocurrency customers.
Mazars is temporarily suspending all operations for its cryptocurrency exchange customers, including proof-of-reserves reports for Binance, KuCoin, and Crypto.com, among others.
A spokeswoman for Mazars’ customer Binance confirmed the news in a statement, adding, “sadly, this implies that we are temporarily unable to operate with Mazars.” Mazars did not reply to a request for comment immediately.
Since the collapse of FTX last month, Mazars has been working with crypto exchanges to produce proof-of-reserves reports. These reports reveal the platform’s cryptocurrency holdings as evidence that its reserves are sufficiently collateralized. While exchanges claim that these reports promote openness, others argue that they are insufficient since they do not disclose information regarding a platform’s obligations.
With Mazars temporarily out of the scene, a spokeswoman for Binance said that the trading giant would prioritise other transparency initiatives. One of the methods being researched is the use of Merkle Tree verification of reserves, according to the spokeswoman. Merkle Trees are data structures that may be used to validate data on the blockchain. Another cryptocurrency exchange, Bybit, has just implemented a Merkle Tree-based mechanism that enables customers to check its reserve holdings.
Binance also emphasised the need for independent auditors to verify these proof-of-reserves filings. “We have gone out to numerous major organisations, including the Big Four, who are now hesitant to perform a PoR for a private crypto company, and we are still searching for a firm that would do so,” stated a representative for Binance.
In fact, Mazars is not the first accounting company to cease dealing with cryptocurrency companies. Thursday, Armanino, a longtime crypto accounting partner, announced the discontinuation of its crypto audit services.