Could Binance Go Bankrupt?

By Bfab | Good vibes | 16 Dec 2022

All major cryptos, including Bitcoin (BTC), Ethereum (ETH) and Binance Coin (BNB) are down today. Binance has indeed declared that Mazars, the auditing firm that had worked with Binance and other crypto exchanges on proof-of-reserves statements, has paused all work for crypto clients:

Mazars has indicated that they will temporarily pause their work with all of their crypto clients globally, which include Crypto.com, KuCoin, and Binance. Unfortunately, this means that we will not be able to work with Mazars for the moment

Consequently, it creates a doubt about the solvency about these centralized exchanges, which leads to the dumping of Bitcoin and altcoins.

Why Mazars decided to pause their work with crypto clients

Mazars’ decision comes at a time when the crypto industry is facing increasing regulatory scrutiny. The firm has stated that it needs to ensure that it is compliant with all applicable laws and regulations when it comes to providing audit services. As such, the firm’s decision is likely related to the fact that the crypto industry is currently facing a great deal of uncertainty in terms of how it will be regulated in the future.

The decision to no longer audit cryptocurrency-related accounts is not only a setback for the industry, but also for Mazars itself. The firm has been at the forefront of providing audit services to the cryptocurrency industry, and this decision is likely to lead to the loss of a significant amount of business.

However, the decision may ultimately be beneficial to the industry in the long run. The fact that Mazars has decided to no longer audit cryptocurrency-related accounts demonstrates that the firm is taking a proactive approach.

What you can do on your side

Although a bankrupt of Binance does not seem to be very likely in the short term, it is still recommended to hold a large portion of your assets on a self-custody wallet, e.g., through MetaMask, TallyHo, Ledger or Trezor. There are many options available.

Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.

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