Cryptocurrency
Binance auditor denied the report on the reserves of the exchange
The cryptocurrency exchange press service confirmed that Binance auditor Mazars has suspended all of its cryptocurrencies, while stressing that Binance’s financial position remains stable and customers’ funds are not threatened.
“Last week Binance passed a stress test, which should finally reassure our customers that their funds are safe. In three days, from December 12 to 14, the net outflow of funds from accounts reached $6 billion, and the exchange processed all withdrawal requests without problems.”
That said, the press office added that it welcomes additional transparency and is thinking about how to provide it. Against this background, the current BUSD exchange rate has also slightly deviated from the dollar.
For example, we use tools such as proof of reserve (PoR) using the Merkle tree because it gives our clients additional assurance that their assets exist on the blockchain and are under the trusted control of the exchange.
Mazars representatives told CNBC in an interview that they decided not to work with cryptocurrency companies so that the firm’s reports would not mislead the public. Consulting company Mazars refused to cooperate with cryptocurrency exchanges. This is reported by Bloomberg, citing a representative of Binance.
As noted by Reuters, the auditor has already disowned the binance audit report and removed the document from its website. Binance argues that Mazars has ceased to provide services to all cryptocurrency companies. The French consulting firm alsostopped working with crypto.com and KuCoin.
The French auditor had time to work with Binance on the exchange’s bitcoin (BTC) reserves. However, as it turns out in the cryptocurrency community, Mazars’ services were not a full-fledged audit that meets professional industry standards, but a data check on a pre-agreed set of criteria. This means that the auditor does not express an opinion or assurance at the end of the audit.
Another unclear point is the decision to combine bitcoin (BTC) and its tokenized variants (BBTC and BTCB). The binance audit report states that Mazars makes no distinction between the two and considers them interchangeable. This was pointed out by Jesse Powell, CEO of cryptocurrency exchange Kraken. He also noted that Mazars considered the collateral value of assets and negative balances.
Previously, we reported that Opera Blockchain Browser will start to verify the code and audit decentralized applications.
Cryptotraders had a tough day: almost 68,000 positions were liquidated on exchanges in the last 24 hours, and the total volume of liquidations exceeded $257,000,000. All this happened against the news of the US Federal Reserve’s rate hike and another Securities and Exchange Commission regulatory action against cryptocurrencies.
Cryptotraders lost $132,000,000 in BTC
Bitcoin, Ethereum, and Ripple were the leaders in the number of forcibly closed positions. BTC liquidations totaled almost $132,000,000; Ethereum traders lost $51,000,000. XRP positions accounted for about $8,000,000 of liquidations. Bitmex exchange executed the largest order of $7.39,000,000.
Cryptocurrency market capitalization has declined 2% in the last 24 hours, but is still above the $1 trillion mark.
The weekly CoinShares report also recorded a massive outflow of funds for six consecutive weeks. During that period, nearly $500,000,000 was withdrawn from cryptocurrency platforms, with $113,000,000 coming from bitcoin. Analysts at the company believe the outflow is due to liquidity needs during the banking crisis rather than a negative outlook. The company mentions that a similar scenario was seen in March 2020 amid a COVID-19-induced panic.
Regulators continue to hunt the cryptobusiness
Another reason for the increased volatility in the market has been harsh action from U.S. regulators. Last night it became known that the U.S. Securities and Exchange Commission sued cryptomagnate Justin Sun, accusing him of fraud and market manipulation.
The SEC also issued a notice of wrongdoing against Coinbase, the largest U.S. cryptocurrency exchange. The securities regulator sued Coinbase Global Inc, for some of the products it offers.
We previously reported that Bitcoin (BTC) tests $28,000, but onchain metrics urge caution.
Employees of the cryptocurrency exchange Binance help clients from China to bypass compliance and verification. CNBC writes about it, citing hundreds of corporate emails from exchange employees on Discord and Telegram. It is reported that Binance has helped over 200,000 users register, bypassing its own security system. One case describes correspondence between a user from China and a Binance employee.
The employee under the pseudonym yaya.z suggested the user from China turn on a VPN, register as a Taiwanese resident and then return the location to China. Binance employees also advise customers not to use VPN services from the U.S., Hong Kong and Singapore, because the exchange does not provide services in those regions, writes CNBC. At the same time, Binance freely processes applications from U.S. email providers like Gmail or Outlook for registration.
The exchange even offers specialized mobile applications for customers from China. A CNBC reporter could download a special mobile application from Binance via email. At the same time, no VPN was needed to download the app, as the download was conducted through the domain of binance[.]com. It is also alleged that the exchange still verifies users with Chinese phone numbers.
An exchange spokesperson denied the existence of a special Chinese version of the mobile application. The exchange also added that it has improved the system to identify users from banned regions. CNBC notes that after providing evidence, Binance removed employee messages from corporate chats to circumvent KYC.
We previously reported that the Ethereum (ETH) price crossed the $1,800 mark, opening the way to $2,000.
The market remains in a bearish trend and bitcoin (BTC) will resume its fall and test $16,000. There are two reasons:
The first statement can be confirmed or disproved by a technical analysis of the cryptocurrency market, but there is not enough additional information for the second.
The market capitalization of altcoins (ALTCAP) does hold nearly $605 billion of resistance. Although ALTCAP has risen above it several times, it didn’t develop above this area.
However, the daily RSI has broken through the bearish divergence trendline (green line). Such a breakout often precedes significant reversals into a bullish trendline. As a result, ALTCAP will move higher towards the $680B resistance area. If not, ALTCAP could fall back to the $518B support area.
There are also those who argue that bitcoin will test the $10000-$11000 area because there is a CME price gap that needs to be filled. The gap refers to the difference between the closing price of bitcoin futures on the Chicago Mercantile Exchange (CME) on Friday and the opening price on the following Monday.
We previously reported that Hong Kong has allocated another $50,000,000 to the crypto industry.
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