Crypto Exchange Audits Criticized as Inaccurate and Incomplete

• Dan Ashmore, a cryptocurrency analyst at Coinjournal, told CNBC that the audit reports by cryptocurrency exchanges were not entirely accurate.
• He stated that the reports only indicated the assets held by the exchanges and didn’t reveal the liabilities of the companies.
• Ashmore added that third-party entities need to look at these centralised exchanges and make financial assessments.

Recently, Coinjournal’s Dan Ashmore spoke with CNBC to discuss the audit reports released by cryptocurrency exchanges. Ashmore expressed his frustration with the reports, stating that they were anything but an audit. He pointed out that while the reports included the assets held by the exchanges, they failed to provide any information on the liabilities of the companies.

The analyst further explained that a proper audit requires the consideration of both liabilities and assets. Unfortunately, the proof of reserve reports published by exchanges such as Binance and OKX failed to provide any information on the liabilities. Ashmore added that this lack of information was a major issue, as it leaves investors in the dark about the financial health of the exchanges.

In addition, Ashmore noted that the recent move by accounting firm Mazars Group to suspend all work with its crypto clients was a concerning one. He stated that exchanges need to take the necessary steps to ensure that their audit reports are comprehensive and accurate. In order to do this, third-party entities need to be involved and given the opportunity to assess the financial standing of the exchanges.

Overall, Ashmore’s comments highlighted the importance of accurate and comprehensive audit reports. Investors need to be able to trust that the exchanges they are investing with are being transparent and honest about their financial standing. As such, it is essential that exchanges take all the necessary steps to ensure that their audit reports are accurate and up to date.


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