FTX Collapse Leads to Calls for Binance Transparency, Full Audit Pending
Binance, the world’s largest crypto exchange in terms of trading volume, has announced that its full audit of its crypto assets and liabilities will take more time to complete. This news comes despite calls for increased transparency from the community following the recent collapse of FTX, another major crypto exchange. Binance’s earlier proof-of-reserves report by auditing firm Mazars has been deleted, adding to the challenges facing the company as it seeks to regain the trust of its customers and the wider crypto community.
Search for Reliable Auditing Firm
According to Binance’s Asia-Pacific head, Leon Foong, the company needs more time to release a full audit of its crypto assets and liabilities. Binance is still looking to hire a top auditing firm to audit its entire balance sheet, but big auditing companies are still learning about the crypto market, and other auditing firms are reluctant to work with crypto firms due to increased scrutiny by regulators. This delay in the full audit has put Binance under intense pressure from the community to increase transparency and regain its reputation as a reliable and trustworthy crypto exchange.
#Breaking: @binance Signals Delay In Full Audit, #Crypto Market FUD To Recur?https://t.co/tQnDXDyeaC#Binance $BNB #CryptoNews
— CoinGape News (@CoinGapeMedia) February 8, 2023
Complex Crypto Audits
Despite these challenges, Binance CEO Changpeng “CZ” Zhao argues that crypto audits are a difficult and complex process. However, Nasdaq-listed Coinbase’s annual statements by leading audit firm Deloitte indicate that large crypto exchanges can be audited effectively. In December, data from Glassnode revealed under-reporting of Bitcoin holdings by Binance in its self-reported proof-of-reserves, and the exchange has admitted to mistakenly storing collateral for some of its tokens in the same wallet as customer funds. Binance is working to quickly fix this error and regain the trust of its customers.
Binance is not deterred by the pressure to increase transparency and is expanding globally, recently acquiring South Korea’s GOPAX crypto exchange to re-enter the market after two years. The company is also focusing on becoming more efficient, increasing its workforce, and identifying areas that need restructuring.
