No more proof-of-reserve checks? Auditors quietly drop crypto projects from portfolios
2 min read
As the FTX collapse highlighted the need for more transparency from centralized crypto exchanges, working with auditors has been the move by top crypto trading platforms to assure users that their assets are fine. However, two of the most prominent auditors have suddenly dropped their crypto auditing services, leaving exchanges hanging at a very crucial time.
At the moment, the official website of the French auditing firm Mazars Group shows that its section, called Mazars Veritas, which is dedicated to crypto audits is now offline. The firm worked with several of the most prominent crypto exchanges including Binance, KuCoin and Crypto.com.
While there’s been no official announcement from Mazars at the time of writing, Binance confirmed that the auditing firm has indicated that it’s temporarily pausing its work with all its crypto clients globally.
Speaking to Cointelegraph, a spokesperson from Binance noted that due to the FTX incident, people have been searching for more assurances that other exchanges won’t collapse. They explained that:
“It was FTX’s failure to ensure exchange assets were greater than its liabilities to customers that caused its insolvency. So, naturally, people want multiple ways of verifying this won’t happen again.”
The firm said that at the moment, they have reached out to other accounting firms, including the Big Four and will work to provide other technical solutions.
Related: Silvergate faces class-action lawsuit over FTX and Alameda dealings
Meanwhile, accounting firm Armanino has also reportedly ended its crypto auditing services. The firm has worked with several crypto trading platforms like OKX, Gate.io and the embattled FTX exchange. Citing anonymous sources, media outlet Forbes reported that the firm may be facing pressure from its non-crypto clients after being named in a class-action lawsuit for being unable to spot problems in FTX.
The accounting firm began its crypto auditing services in 2014, offering services like proof-of-reserve audits and stablecoin attestations, services that are currently in high demand as the FTX collapse pushed users to become more wary of centralized crypto trading platforms.
