- Analysis reveals that the client’s BTC reserves at Crypto.com are collateralized.
- The report is based on information provided by the client about the on-chain addresses of assets.
- Centralized crypto exchanges have been under pressure to offer more transparency.
A new study from the international financial audit, tax, and consultancy firm Mazars was made public. This report was released on Friday by Crypto.com, a crypto exchange that is enormous in terms of the trading volume. The analysis reveals that the client’s Bitcoin (BTC) reserves at Crypto.com are collateralized.
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This comes after competing exchange Binance last week produced a comparable report from the same auditor that seemed to prove its reserves. On December 7, Mazars performed a similar comparison to Binance. This was between client balances and assets held at on-chain addresses on Crypto.com.
However, the report is not an official audit, but a “matching exercise based on information provided by the client about on-chain addresses of assets. It is also a client database of customer balances,” according to Francine McKenna, lecturer in financial accounting at the University of Pennsylvania.
It is no better than the Binance report, which is not surprising since it is the same firm and partner doing it.
According to the study, more than 100% of the in-scope assets were in Crypto.com’s control.
Providing audited proof of reserves is an important step for the entire industry to increase transparency and begin the process of restoring trust.
Kris Marszalek, CEO of Crypto.com
Following the fall of FTX, a once-reliable cryptocurrency exchange that is currently being investigated for fraud, centralized crypto exchanges have been under pressure to offer more transparency.
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