• Dan Ashmore, a cryptocurrency analyst at Coinjournal, told CNBC in a recent interview that the audit reports by cryptocurrency exchanges were not entirely accurate.
• Mazars Group suspended all work with its crypto clients, including Binance, KuCoin and Crypto.com.
• Ashmore stated that the reports only indicated the assets held by the exchanges and didn’t reveal the liabilities of the companies and that third-party entities need to look at these centralised exchanges and make financial assessments.
Recently, Dan Ashmore of Coinjournal gave an interview to CNBC in which he stated that the audit reports by cryptocurrency exchanges were not entirely accurate. The analyst pointed out that the reports only indicated the assets held by the exchanges and didn’t reveal the liabilities of the companies. This in turn caused Mazars Group to suspend all work with its crypto clients, including Binance, KuCoin and Crypto.com.
When discussing the move, Ashmore stated that it was a disappointing one for the crypto industry and that it was not possible to do an audit without mentioning liabilities. Ashmore further elaborated that the proof of reserves needed to become proper audits in order to give investors a better understanding of the exchanges’ financials. He also noted that third-party entities need to look at these centralised exchanges and make financial assessments.
Ashmore’s comments come after several exchanges, including Binance and OKX, have published their proof of reserve reports in the last few months. However, the analyst believes that these reports are not enough to give investors a true understanding of the exchanges’ financials. He thus concluded that a proper audit is necessary in order to give investors a better understanding of the exchanges’ financials.
The need for proper audits is growing as more investors are looking to enter the cryptocurrency space. With proper audits in place, investors will have the confidence they need to invest in the space and be assured that their investments are safe. As such, it is crucial that cryptocurrency exchanges take the necessary steps to ensure that their audit reports provide a true representation of their financials.