Binance, the world’s largest cryptocurrency exchange (and based in the Cayman Islands) is in the news and not for good reason.
Binance’s “proof of reserves” raises doubts in the face of an elusive Mazars report, and US prosecutors are considering a money laundering indictment.
But if not, go ahead folks, keep believing the crypto eco-system is healthy. Well no. Not only is it not healthy, but it is also unhealthy and finally, before being able to invest serenely in this delirious world, it will first be necessary to go through the great cleaning of the stables of Augeas.
“In the wake of the bankruptcy of FTX, CZ, the boss of Binance, the largest cryptocurrency exchange in the world in terms of trading volumes, launched the idea of “proof of reserve”, encouraging exchange platforms to disclose the details of their reserves to reassure them of their financial health”. The idea is to “prove” that the company does indeed hold the bitcoins and crypto-assets it claims to hold. But even that doesn’t prove much.
Binance then released some unaudited details of its reserves, the December 7 release of an independent report from Mazars, which was presented as evidence that CZ’s platform will not follow the same path as Sam Bankman’s- Fried.
Gray areas in Mazars’ report on Binance’s Bitcoin reserves
However, according to specialists interviewed by the Wall Street Journal, this report does not contain only reassuring elements. These have indeed raised what could be described as red flags in Binance’s finances.
Mazars’ report was criticized in particular for its lack of information related to the quality of internal controls and the method used by Binance’s systems to liquidate assets as part of margin loan hedging.
WSJ sources also expressed concerns about the lack of information about Binance’s corporate structure. Notably, Binance Chief Strategy Officer Patrick Hillmann was reportedly unable to cite the name of Binance’s parent company, arguing that the company has been in the midst of a reorganization for nearly two years.. (Source here)
At Binance as elsewhere it is a mess and the most total opacity.
I don’t know what the Mazars company is playing, but if there are many missions that I will refuse it is those of this type, as the possibilities of shenanigans are important and the scamps at the controls in cryptocurrencies are much more smarter than the friendly ties of auditing and consulting firms who risk getting their fingers caught in the jam jar.
money laundering charge.
“According to information obtained by Reuters, US prosecutors are divided on a possible indictment of Binance for money laundering.
The Reuters report indicates that there is a division among US DOJ prosecutors involved in the investigation into Binance’s compliance with US anti-money laundering laws.
Some prosecutors reportedly believe they have compelling evidence to act aggressively against Binance and file criminal charges against its executives, including founder Changpeng Zhao, nicknamed “CZ.”
However, Reuters sources also said other prosecutors have pleaded for restraint pending additional evidence.
Recall that this is an investigation that began in 2018, but which undoubtedly took on new importance following the shock of the bankruptcy of FTX.
The report also states that Binance defense attorneys have reportedly held meetings in recent months with the Department of Justice including in regards to potential plea deals.” (source here)
All this is great delirium, and I invite you to stay very far from the crypto universe if it is for a heritage purpose, cryptos have nothing to do in asset management as a good father. If you want to have fun and speculate with a very small share of household money like you would go one evening to gamble 500 euros at the Casino, then you can give it a try for the beauty of the game and intellectual leisure.
For the moment we are only at the beginning of the explosion of this bubble and the great cleaning of the operators.
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