Hedge fund manager Michael Burry famous for predicting The problem with auditing cryptocurrency exchanges such as Binance and FTX is the same as when he started using new kinds of credit his default his swaps, says Financial Crisis. “Our auditor was learning on the job,” he explained, adding, “Not a good thing.”
Michael Barry on Audit of Cryptocurrency Firms
Renowned investor and founder of investment firm Scion Asset Management Michael Barry announced Friday that He said of the Proof of Reserve (POR) audit: Exchanges including Binance and the collapsed exchange FTX are pointless.
Burry is best known as the first investor to foresee and profit from the U.S. subprime mortgage crisis from 2007 to 2010. He is featured in his Michael Lewis book on mortgages, The Big Short. Crysis made into a movie starring Christian Bale.
Burry tweeted about his Mazars Group suspension of proof-of-reserve (POR) audits of cryptocurrency firms:
This is the problem. When I started using a new kind of credit default swap in 2005, our auditors were learning on the job. That’s not good. The same goes for FTX, Binance, etc. Audits are essentially meaningless.
Barry’s tweet referenced Bloomberg’s article in which the French accounting firm expressed concern over intense media scrutiny and the market’s lack of relief. Since it shows , it explains that it has stopped virtual currency-related business. Proof-of-reserve reports published so far by Binance, Crypto.com, Kucoin, etc.
The news follows criticism from Jesse Powell, CEO of rival crypto exchange Kraken, who recently said that Binance’s POR I blamed myself for being audited by Mazars. More than $3 billion of his funds were withdrawn from Binance this week.
Addressing concerns about his exchange’s POR in his interview with CNBC on Thursday, Binance CEO Changpeng Zhao (CZ) said most accounting firms also claimed that it did not know how to audit cryptocurrency exchanges.
Executives ask why Binance doesn’t use one of his big four accounting firms (Deloitte, EY, KPMG, Pricewaterhousecoopers (PwC)) to audit its books and why cryptocurrency companies I was asked if I could not provide the file. Data for auditors to give their stamp of approval with confidence. Binance bosses answered simply:
Many of them don’t even know how to audit cryptocurrency exchanges.
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