Binance has announced that it will conduct the proof-of-reserve (PoR) audits necessary to verify its assets in response to the Fall of FTX .
The Wall Street Journal reported that Mazars, the accounting firm that worked for former United States President Donald Trump’s company, was appointed as an official auditor to conduct a “third party financial verification” as part of Binance’s PoR updates.
A spokesperson for Binance reported that the accounting firm is already reviewing all of Binance’s publicly-shared information on Bitcoin (BTC) PoR and will also be verifying future updates and tokens. The first verification update for BTC will be completed this week, he told CoinDesk.
Mazars is an international accounting firm headquartered in Paris. Its U.S. division, Mazars USA, was the longtime accounting firm for Donald Trump and had been involved in a controversy with a House Oversight and Reform Committee’s request for some of Trump’s financial records since 2019. However, the firm reportedly cut ties with Trump and his family in 2022.
The news comes after Binance moved tens of millions of dollars of cryptocurrency as part of its PoR audits. On Nov. 28, Binance sent 127,351 BTC to a mysterious wallet, with CEO Changpeng “CZ” Zhao subsequently announcing that the transaction was being done as part of the ongoing PoR process.
The fact that Bitfinex recently withdrew and hid large amounts of cryptocurrency metadata when it was “audited” has created a number of concerns in the crypto community, as previously, CZ argued that it’s bad news when exchanges have to prove their wallet addresses by moving crypto around.
Previously, Binance published the Merkle Tree-backed proof of funds for Bitcoin. The firm announced a PoR process and mechanism in response to the FTX exchange going bankrupt. The latest measure is publishing proof of funds for Bitcoin as well.
After FTX shut down, many exchanges like OKX and KuCoin released their PoR reports to maintain customer trust. Meanwhile, other industry observers claim that this system is largely useless unless exchanges provide liabilities. Which is very hard to fake.