Big accounting firms won’t audit Binance

Four accounting giants, Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers, are unwilling to audit Binance, despite one of them still working extensively with Coinbase.

The largest crypto exchange Binance is looking for another auditor for its proof-of-reserves after mixed public reaction to an audit conducted by Mazars. In simple words, after the publication, both Binance and Mazars received criticism on content and the auditor’s relatively small size compared to the crypto exchange. Mazars also conducted audits for KuCoin and Crypto.com. On December 18, Mazars spokesman told CNBC:

We paused our activity relating to the provision of Proof of Reserves Reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public.

Related: Binance’s bitcoin reserves are overcollateralized

Binance CEO, Changpeng Zhao, said the firm is currently working with auditing firms, yet he didn’t name which ones. He added, “interestingly, many audit firms are kind of scared to work with crypto businesses.”

There are a few audit firms that audited FTX and they got burned because they give the stamp of approval, and I don’t know how they did the audits. But audits don’t reveal every problem. Many of those firms don’t know how to audit crypto: user assets and different blockchains.

According to CNBC, the Big Four accounting firms have not yet taken action to stop working with cryptocurrency clients. That includes Coinbase’s auditor, Deloitte. Yet, neither of them has decided to work with Binance.

Related: Binance halts USDC withdrawals

After the FTX collapse, Binance was the next firm to fall under public scrutiny. As reported by Guardian, continuing FUD since last week caused a $6 billion withdrawal. Binance spokesman assured:

To that end, Binance’s capital structure is debt free and, over the past week, Binance passed a stress test that should give the community extraordinary comfort that their funds are secure. Despite the large number of withdrawals 12-14 December, $6bn of net withdrawals over three days, we were able to fulfill them without breaking stride.