“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,” Bloomberg reported a Binance spokesperson as saying.
A KuCoin spokesperson said while Mazars already audited the exchange's proof of reserves, the firm is now open to other reputable auditing firms for future works.
"In the future, we are open to working with any leading and reputable audit to provide the third-party verification report," the spokesperson said.
Requests for comment about Mazars from Crypto.com has not yet been returned.
Following Binance's announcement, Bitcoin (CRYPTO: BTC) dropped as much as 3.7% and is now trading down 2.53% at $17,028.53, while Ethereum (CRYPTO: ETH) was down 4.47% at $1,214.90 at last check Friday morning.
Following the collapse of cryptocurrency exchange FTX (CRYPTO: FTT) in November, prominent crypto exchanges such as Binance, Crypto.com, KuCoin and others have scrambled to get their “proof of reserves” verified by Mazars, which is based in France.
Proof Of Reserves Under Scrutiny
Proof of reserves reports only reveal a firm's assets rather than its liabilities and act as snapshots in time to indicate that the information provided by clients generally checks out. These reports have drawn criticism because they are not thorough audits.
“We embrace additional transparency and we are looking into how best to provide those details in the coming months,” the Binance spokesperson further said.
In an interview with CNBC’s Squawk Box on Thursday, Binance CEO Changpeng Zhao said a lot of auditing firms are somewhat reluctant to work with cryptocurrency companies.