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Termination of cooperation with the exchange, Mazars: These audit results are based on agreed-upon procedures, with very limited data.

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Termination of cooperation with the exchange, Mazars: These audit results are based on agreed-upon procedures, with very limited data.

Binance founder Changpeng Zhao CZ has been actively promoting the reserve proof mechanism for exchanges following the FTX collapse, but he seems to have overlooked the fact that traditional auditing firms are not yet ready to audit crypto assets. After Mazars abruptly terminated cooperation with major crypto exchanges, CZ has not issued any statements to reassure users.

Mazars Suspends Cooperation with Exchanges

Earlier reports indicated that audit firm Mazars removed the audit pages of Binance and Kucoin on 12/17, following which Bloomberg reported that Mazars has suspended cooperation with exchanges.

Subsequently, CNBC reported that a Binance spokesperson confirmed this news, which also included the termination of cooperation with Crypto.com.

Mazars: This is Not Formal Audit

Mazars stated to CNBC:

Due to concerns about public misunderstanding of these reports, we have suspended providing audit reports for crypto entities. Mazars' reserve proof reports are performed in accordance with agreed-upon procedures and do not represent any assurance or audit opinion on specific subjects. On the contrary, the audit reports of these exchanges are very limited and are based on agreed-upon procedures reports performed at specific times.

In short, the three exchanges list the tasks for Mazars to perform, and Mazars executes and publishes the reports.

CZ Out of Options?

Following the collapse of FTX, CZ vigorously promoted the exchange's reserve proof mechanism, but he seemed unprepared for traditional audit firms not being ready to audit crypto assets.

In a recent CNBC interview, he also mentioned that reputable audit firms are afraid to work with crypto companies, and many of them still do not know how to audit crypto exchanges, including auditing user assets on different blockchains. He stated that he is working with multiple audit firms but did not disclose the names.

Regarding the negative impact of Mazars' cancellation of cooperation on Binance, CZ did not respond positively to the next steps after Mazars' cessation of cooperation; instead, he made a joke on Twitter with famous stock market contrarian Jim Cramer.

On 12/14, Jim Cramer tweeted that he felt very reassured about Binance, but on 12/16, he tweeted again, stating that he trusts DraftKings, a gambling company, more than Binance, and mentioned that money is placed there without needing to check the account multiple times a day like Binance users.

CZ seemed pleased that Jim Cramer does not trust Binance because if Jim Cramer's contrarian indicator effect comes into play again, does it mean Binance is relatively safer?