Binance’s Proof-of-Reserve Audit Reports Removed by Mazars Amid Regulatory Scrutiny

Crypto exchange Binance has seen its proof-of-reserve audits removed from the auditor Mazars’ website amid increasing scrutiny from regulators and market participants.

Mazars’ official site now shows that the firm has completely discontinued Mazars Veritas, a section dedicated to conducting cryptocurrency exchange audits. The audits included the use of the Silver Sixpence Merkle Tree Generating tool to complement proof-of-reserve reports aimed at enhancing trust and transparency in the digital asset sector.

According to a report from Bloomberg on Dec. 16, Mazars has ceased to perform proof-of-reserve audits for crypto companies. Notably, other accounting firms, including Armanino, which previously audited FTX, have similarly stopped working with crypto exchanges like OKX and Gate.io.

Mazars is also known for its ties to former United States President Donald Trump‘s company, which has raised eyebrows in some circles. Binance had appointed Mazars to conduct its proof-of-reserve audits in late November.

A spokesperson from Binance stated that Mazars indicated it would temporarily pause its work with all crypto clients globally, which includes the likes of Crypto.com and KuCoin. The spokesperson added:

“Unfortunately, this means that we will not be able to work with Mazars for the moment.”

In light of this, Binance has reached out to multiple large auditing firms, including Big Four auditors, but noted they are currently unwilling to conduct proof-of-reserve for private crypto companies. Nonetheless, Binance reassured users that it remains committed to delivering verified proof of reserve utilizing Merkle Tree methods to demonstrate that customer assets exist on on-chain addresses under the exchange’s control.

In response to the recent news, Binance CEO Changpeng Zhao (CZ) took to Twitter to express his stance, retweeting a comment that suggested queries regarding the auditing firm’s decision to stop working with crypto operators would be best directed at Mazars. Zhao later emphasized the transparency of blockchain technology, saying:

“Blockchains are public, permanent records. It’s the most auditable ledger.”

Previously, a Mazars report confirmed on Dec. 7 that Binance had control over 575,742 Bitcoin (BTC) in customer assets, with a total value of around $9.7 billion at the time. However, this report has also been removed from Mazars’ website.

Concerns have been raised by some financial specialists regarding the Binance reserve report, particularly regarding the lack of transparency regarding internal controls and how Binance liquidates assets to cover margin loans. As of the time of writing, Mazars has not responded to Cointelegraph’s requests for comments.