Binance's proof-of-reserves raises red flags: Report
Corporate structure, Bitcoin liabilities and internal control quality are among the points of concern. Binance's efforts to improve transparency of its reserves also exposed red flags in the crypto exchange's finances, according to accounting and financial specialists consulted by The Wall Street Journal. As noted by a former Financial Accounting Standards Board (FASB) member and investment manager, the report released by the audit firm Mazars does not bring investors confidence about the exchange's finance as it lacks information related to the quality of internal controls and how its systems liquidate assets to cover margin loans. Another red flag raised by the newspaper's sources is regarding the lack of information about Binance's corporate structure. As per the report, Binance’s chief strategy officer, Patrick Hillmann, was unable to provide the name of Binance’s parent company since it has been going through a corporate reorganization for almost two years. ...