The Big Short’s Michael Burry says audits of crypto-currency exchanges like Binance and FTX are meaningless

Hedge fund manager Michael Burry, famous for predicting the 2008 financial crisis, says the problem with auditing cryptocurrency exchanges, like Binance and FTX, is the same as when he started using a new type of credit default swap. “Our auditors were learning on the job“he described, adding that it was “not a matter ofnot a good thing“.

Michael Burry on audits of crypto-currency companies.

Michael Burry, said Friday that proof-of-reserves (POR) audits of crypto-currency exchanges, including Binance and the collapsed FTX exchange, make no sense.

Michael Burry is best known for being the first investor to foresee and profit from the U.S. subprime mortgage crisis, which occurred between 2007 and 2010. He is featured in “The Big Short“, a book by Michael Lewis about the mortgage crisis, which was made into a movie starring Christian Bale.

Commenting on accounting firm Mazars Group’s discontinuation of reserve proof audits (ROPs) for crypto-currency companies, Burry tweeted:

Here’s the thing. In 2005 when I started using a new type of credit default swap, our auditors were learning on the job. That’s not a good thing. The same is true for FTX, Binance, etc. The audit is essentially meaningless.

Burry’s tweet refers to a Bloomberg article explaining that the French accounting firm has suspended its work on crypto-currency companies due to concerns over intense media scrutiny and indications that markets have not been reassured by the proof-of-condition reports it has issued so far, including for Binance, and Kucoin.

Read:  McConnell Criticizes Censorship of Kinzinger and Cheney for Opposing 'Violent Insurrection'

The news follows a review from the CEO of rival crypto-currency exchange Kraken, Jesse Powell, who recently denounced Binance’s ROP audited by Mazars. This week, more than $3 billion in funds were withdrawn from Binance.

In an interview with CNBC on Thursday, Binance CEO Changpeng Zhao (CZ) also said that most accounting firms don’t know how to audit crypto-currency exchanges.

Read:  Pollution causes structural changes in the brain up to eight years of age

The executive was asked why Binance doesn’t use one of the big four accounting firms – Deloitte, EY, KPMG and Pricewaterhousecoopers (PwC) – to audit its accounts, and whether the crypto-currency company was unable to provide files and data so that the auditors would be comfortable giving their stamp of approval. Binance’s boss simply replied:

Many of them don’t even know how to audit crypto exchanges.

The Best Online Bookmakers February 24 2024

BetMGM Casino