- Binance’s total assets or total liabilities are not included in the Mazars report.
- Agreed-upon procedures engagement is not an audit.
Despite the world’s largest centralized cryptocurrency exchange Binance’s efforts to boost transparency, its reserves also revealed warning signs in the exchange’s finances. Binance has lack information regarding the exchange’s business structure and its funds are still a mystery, as per the WSJ report.
Last month, Binance partnered with the global financial audit firm Mazars to prepare a ‘Proof of Reserve’ report and its user fund transparency initiatives to reassure its users. Following that, the international accounting firm released a five-page letter as a reserve report on December 7, 2022. The letter stated Mazars did “not express an opinion or an assurance conclusion,” which means it wasn’t vouching for the findings. Also, Mazars claimed that Binance had requested that it do its research using “agreed-upon procedures.”
The global audit company Mazars stated;
An agreed-upon procedures engagement is not an audit, review or other assurance engagement.
Binance Funds Are Mystery?
According to the Financial Accounting Standards Board (FASB), Mazars’ report does not encourage investors with confidence regarding Binance’s financial position. Further, Binance lacks information about internal controls and how Binance’s systems dispose of assets to cover off-margin loans.
Also, Binance’s total assets or total liabilities are not included in the report. Instead, it was tied to Bitcoin’s (BTC) liabilities and assets. And the crypto exchange said it would continue disclosing details on additional cryptocurrency tokens in the upcoming weeks.
However, Mazar’s audit report on Binance’s Bitcoin (BTC) reserve claimed that the ‘Binance reserves were 101% collateralized.’ In addition, the centralized exchange Binance reportedly has control of about 575,742.4228 Bitcoin that belongs to its users and is worth over $9.7 billion.
