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Binance Proof-of-Reserves Auditor Mazars Pauses All Work for Crypto Clients

Jamie Crawley
Updated ·2-min read

Mazars, the auditing firm working with Binance and other crypto exchanges on proof-of-reserves statements, has paused all work for crypto clients, Binance said in an emailed statement and Mazars confirmed to CoinDesk.

"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. The suspension was reported earlier by Bloomberg.

Mazars said in an emailed statement that it had only paused its work for crypto firms relating to proof-of-reserves reports. "This is due to concerns regarding the way these reports are understood by the public," the company said.

Mazars added that its proof-of reserve reports "do not constitute either an assurance or an audit opinion on subject matter. Instead they report limited findings based on the agreed procedures performed on the subject matter at a historical point in time."

The accounting firm performed a proof-of-reserves assessment of Binance earlier this month, finding its bitcoin reserves were overcollateralized. The link to the report on Mazars' website no longer works.

The auditor also found that Kucoin's BTC, ETH, USDT and USDC reserves were all overcollateralized. This report is also no longer available. Mazar's assessment of Crypto.com's reserves found them to be fully backed 1:1.

Crypto exchanges came under pressure to provide proof of reserves in the wake of the of collapse of FTX, a once-dominant exchange that went bankrupt last month. Former CEO Sam Bankman-Fried is now in custody in the Bahamas on charges of wire fraud and conspiracy to commit money laundering, among others.

Binance coin (BNB) fell after the announcement. It has lost about 5% in the past 24 hours, CoinDesk data shows. Crypto.com's CRO has lost 3.9% and KuCoin's native token KCS around 2.5%.

Mazars was not immediately available to respond to CoinDesk's request for further comment.

Read more: CryptoQuant: On-Chain Data Shows Crypto Exchange Binance Isn't Exhibiting ‘FTX-Like’ Behavior

UPDATE (Dec. 16, 12:35 UTC): Adds price performance of Binance's BNB token, Crypto.com's CRO and Kucoin's KCS.

UPDATE (Dec. 16, 16:58 UTC): Adds confirmation and comments from Mazars.