Binance auditing firm Mazars deletes the Proof of Reserves report and suspends working with Crypto companies

CZ, the CEO of Binance came under heat yesterday during an interview with CNBC Squawk Box regarding auditing in crypto.

When confronted by journalist Andrew Sorkin regarding why Binance hasn't been audited by any of the Big-4 auditing firms, CZ stated that these firms do not understand cryptocurrency accounting.

In another question about the money that they received when SBF bought CZ's FTX stake worth 2.1 billion in 2021 and whether they are prepared to hand back that money to creditors if they were asked to, he evaded answering.

Claw back claims can be made by liquidators protecting creditors interest in transactions made 90 days before bankruptcy. But, as the Madoff case showed, claw backs can stretch back years if the liquidators can prove that the other party (Binance) knew about the FTX insolvency in 2021. These claims will be fought for years in court by lawyers of both parties.

Mazars, the French auditing firm that did the Proof of Reserves assessment/audit for Binance, Kucoin, and Cryptodotcom has suspended working with crypto clients. Furthermore, Mazars deleted its Binance Proof of Reserves assessment, with the link to the report disappearing from their website.

This is concerning for the whole ecosystem. Auditors are pulling out of crypto firms because they are not happy about the access to information that crypto exchanges are providing, and which are baring them from doing full audits. Thus, they don't want to put their name on such reports for fear of reputation, legal, and financial damages they might be liable to.

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