Binance is facing a stress test following news that its auditor Mazars Group has dropped the cryptocurrency exchange as a client.
Mazars has not singled Binance out though- the France-based group has dropped all of its cryptocurrency clients according to Binance.
Speaking to Bloomberg, a Binance spokesperson said: "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."
Proactive has reached out to Mazars for confirmation.
Mazars Group found itself at the centre of the crypto sector when the collapse of major digital asset exchange FTX caused a mass push for transparency among FTX’s competitors.
Binance pledged to release proof of reserves to show that all user funds are backed by collateral.
Mazars’ audit did prove that Binance’s reserves were fully backed, but the report has now been removed from the auditor’s website.
Binance head Changpeng ‘CZ’ Zhao has sought to fend off the negative press by assuring users that their funds are safe in a Thursday interview with CNBC.
If Binance encounters any serious problems in the coming days, it could provide a glimmer of schadenfreude for former FTX head Sam Bankman-Fried, should news reach him in Fox Hill Prison.
Read more: Sam Bankman-Fried: From crypto king to handcuffs
Binance head CZ kickstarted FTX’s cataclysmic collapse when he announced over Twitter that he was dumping billions of dollars worth of FTX’s FTT token on the market.
The pursuing FTT death spiral exposed serious issues with FTX’s balance sheet, including possible fraud. Bankman-Fried now faces life behind bars.
Binance’s stablecoin loses value
Binance may very well be in good order, but speculation has caused a bit of a run on the exchange’s native BNB token, having dipped nearly 15% in the past week.
For comparison, benchmark cryptocurrency bitcoin (BTC) is down a little over 1%.
More worrying for Binance is the considerable fall in market capitalisation of its BUSD stablecoin.
Nearly US$4bn worth of BUSD has been redeemed in the past three days, the largest observable fall in such a short time since the coin’s inception in late 2019.
Despite the large-scale outflows, BUSD has managed to retain its dollar peg.
Proactive has reached out to Binance and Mazars Group for a comment.