Investor Michael Burry Calls Proof-of-Reserves Audit Meaningless PlatoAiStream Data Intelligence. Vertical Search. Ai.

Investor Michael Burry Calls Proof-of-Reserves Audit Meaningless

  • Burry is regarded as the first investor to correctly predict U.S. subprime mortgage crisis.
  • Binance CEO Changpeng Zhao (CZ) addressed criticisms of the POR of his platform.

Michael Burry, the founder of the investment company Scion Asset Management. And a well-known investor, said on Friday that proof-of-reserves (POR) audits of cryptocurrency exchanges such as Binance and the defunct exchange FTX are pointless.

Furthermore, Burry is regarded as the first investor to correctly predict and benefit from the 2007–2010 U.S. subprime mortgage crisis. Moreover, the renowned investor tweeted in response to the news. The accounting firm Mazars Group will no longer provide proof-of-reserves audits for cryptocurrency companies.

The investor stated:

“This is the problem. In 2005 when I started using a new kind of credit default swap, our auditors were learning on the job. That’s not a good thing. Same goes for FTX, Binance, etc. The audit is essentially meaningless.”

Investor Anxiety Not Quelled

Furthermore, in his tweet, Burry links to a Bloomberg piece. That explains how a French accounting company ceased work on cryptocurrency enterprises. Out of fear of media scrutiny and signs that its proof-of-reserves reports for crypto exchanges like Binance, Crypto.com, and KuCoin have not quelled investor anxiety.

Jesse Powell, CEO of competing cryptocurrency exchange Kraken, recently criticized Binance’s POR evaluated by Mazars, prompting this announcement. Moreover, a total of over $3 billion has been taken out of Binance this week.

During an interview with CNBC on Thursday. Binance CEO Changpeng Zhao (CZ) addressed criticisms of the POR of his platform and argued that most accounting firms are not familiar with auditing cryptocurrency exchanges.

The executive was questioned about whether or not the crypto firm could not provide the necessary files and data for auditors to feel comfortable giving their stamp of approval.

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