Major auditors began to refuse to conduct inspections of crypto exchanges

Major auditors began to refuse to conduct inspections of crypto exchanges

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Major auditors began to refuse to conduct inspections of crypto exchanges
Mazars and Armanino suspended the practice of providing services to crypto-industry platforms

Audit firms have begun to refuse to work with companies from the cryptocurrency industry. For example, auditors Mazars, which recently audited Binance reserves, have suspended audits of cryptocurrency companies. Armanino, a firm that worked with FTX, is also discontinuing its crypto audit practice and turning away clients.

Mazars Group, the French accounting firm that Binance, KuCoin, Crypto.cоm and other major industry players have turned to to verify their reserve assets, has stopped all work with cryptocurrencies because markets don't trust its "reserve proof" reports, Bloomberg reported, citing a letter obtained from Binance.

\The Web site that hosts Mazars' reports for cryptocurrencies is currently down.

Another accounting firm, Armanino, which has been in the crypto industry since 2014, is also discontinuing its crypto audit practice and turning away clients, Forbes writes, citing sources familiar with the matter. According to their information, the firm's cryptocurrency division may be winding down under pressure from Armanino's non-cryptocurrency clients. These clients are concerned that the reputational risk to the firm would call into question their audits.

Armanino, which previously audited exchanges OKX and Gate, was named a defendant in a class action lawsuit in November 2022 for failing to detect irregularities at FTX.US after auditing the exchange last year, according to the article. The class action lawsuit was filed by Stephen Pierce, an FTX customer who he claims lost $20,000.


Mazars' audit report on Binance reserves, released Dec. 7, drew criticism and sowed some panic in the cryptocurrency community. Customers of the exchange started withdrawing funds and the value of the BNB token started falling. Changpeng Zhao warned employees about the coming difficult period, urged them to ignore rumors and assured that the exchange "will survive any crypto winter."

 

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