Topic: Binance's Alleged Crypto Audit Failed, Its Auditor Refused to Vouch For It - page 3. (Read 625 times)

Revenge drama or will everything be transparent in time? I don't really follow Binance news, because since their dispute with FTX, they are gradually going to get the same scheme too. But if indeed everything can be proven in court that Binance is also playing with users' funds, automatically all exchanges will undergo a thorough audit. It's already a risk for the biggest exchanges to find support, but fighting such a large influx must also be tough on Binance side.

Aside from this audit failure, there's another thing that's been with Binance and it came recently from Reuters.

~ Exclusive: U.S. Justice Dept is split over charging Binance as crypto world falters

This is a long read and too many details that are there but people right now are waiting what will be the response of CZ according to this news that Reuters has published.

a reserves audit is different to what you describe

binance shows the bitcoin addresses it has coin control over
also shows the user balance total

the numbers align. to show that binance does have funds on hand to cover balance

however separate from that people are questioning a morals of ethics of "but would he use those reserves to give to customers"

which is a whole different story.. not about reserves or proof of reserves but about desire/demand to decide to honour requests

if you have a credit card balance of $500
and you have a bank savings account of $505

it shows you have the capacity/reserves to pay the credit card bill when it comes due

but.. separate from that simple audit..
it does not prove IF you will decide to pay a debt at the end of the month or not or use your $505 on other novelty items.

---

here is what i would like to see
a signed and notarised statement from CEO&CFO of exchanges, with a court clerk as witness that say something like:

"these X bitcoin addresses serve the sole purpose of funding reserves of customers balances. should these reserve funds be used for any other purpose i plead pre-emptively guilty of fraud and accept any and all penalties sentenced to me in court. should funds be used outside of meeting customers withdrawal balance requests"

Weird audit...
Let me explain my idea. An Audit Specialist is a person who has an excellent understanding of the area he is auditing. The result of the audit, in this case, is to confirm or deny the presence of reserves. Reserves - they either exist or not. An audit based on the results can say: I analyzed the transactions: for such and such a period, I recorded transactions that arrived in cold wallets. The amount of income, like this, in such and such cryptocurrencies ... The balance at the time of the audit is like this. The withdrawal of funds amounted to such a sum. Dibit / credit converges, does not converge, the discrepancy is like this - an explanation of the additional expense - like this (these are all conventions, purely for example).

But if he cannot confirm or deny, this means that the person could not conduct a normal audit and obtain the necessary data. That's why I can't confirm or deny.

In my opinion, the fate of the Binance cryptocurrency exchange is being decided right now. 

What is happening now? 

Recently there was a collapse (bankruptcy) of the FTX cryptocurrency exchange.  As a result, Binance has come under the scrutiny of US regulators. 

In fact, the regulator can easily make claims against any financial company.  And these claims are true.  Binance is a huge financial structure, in relation to which it is not even clear where exactly its parent company is located. 

I think if Binance can protect itself and its interests now, it will function for a very long time, and the BNB token will reach the price of $5,000.

comparing the user agreements and policies of for instance
binance vs greyscale

customer "bans"
binance when banning a customer still allows a customer to log in, but features disabled like trading. the customer is given time to withdraw value close account and leave

greyscale says they can decline all access and deny use of all of their site for customers that are banned without notice or reason

custody of funds
binance shows bitcoin addresses of bitcoin funds that total the same total of customers balance

greyscale, tells customer it does not hold custody of funds, its locked in coinbase "vaults" and coinbase has a security policy to not disclose. coinbase is not regulated by SEC or CFTC

im more concerned of the contagion of the DCG portfolio of exchanges which includes coinbase and greyscale, oh and until recently(after collapse) FTX

I think it has the best interest of itself in mind. It's just become quite present on social media and in crypto that it can look to have the best interests of its customers in mind.

It may find ways to serve both but I doubt it'll hold back if it finds (more) ways to exploit its customers (like when they kept withdrawal fees far higher than they had to be - though they might've just realised they were funding their competitor).

Which leaves at least me to question why they've done this now? Why?

Less competition = more customers coming to you. Why would you want to get an audit done where you aren't certain you're going to pass the audit? Binance isn't great at dealing with regulators, perhaps it's just not great at communication except for some who want to believe what they say and not verify their claims.

Either that or this is some plan to keep them in the news, maybe to make those who didn't want to do kyc come back or to make those who did want to use them more - there's presumably a lot of people who have used futures to gamble in the past and it's "good" free advertising for that.

The problem with most of these exchanges is that their financial transactions most times are shredded in secrecy. This shouldn't be the standard for exchanges because customers deserve to know where and how their money is used. That was how FTX claimed that they had their customers at heart. Just like FTX is might be possible that Changpeng Zhao is running Binance like his personal business.

The most important factor is financial business is trust. And trust is build when clients are sure that their funds are in safe hands. And a transparent audit report is very important to boast the confidence customers have in your business.

I am desperately hoping that this news is just another media stunt. This is because Binance is a big player in the cryptocurrency industry that any financial disruption would really affect the market negatively. There have been reports that some exchanges are manipulating their financial dealing to outsmart competitors and gain customer's trust. But auditors should be able to vouch for a company's finance dealings if they are clean, standard and  accurate.       
 

While I don't have much faith in that news source because I've never heard of it before, as soon as you hear these kind of rumors it can be rather unsettling. These are the sort of small indicators that you might have heard about FTX a few weeks or even months before the total collapse of it. Not only that, even if the company is perfectly solvent, if such talk starts to work it's way around then it can create a domino effect that turns a healthy company into a company ready to collapse. I just hope that Binance have been wisely reinvesting all the obscene fees that they've managed to collect over the years from their many customers, dunno if they still do it but that put me off them for good.

I won't jump into conclusion until everything is cleared and all accusation has valid proof.  We cannot trust media nowadays since most of them are created or paid with malicious intent.  I believe this news is possible a derailing tactics so that attention of people will be shifted on Binance issue rather than the current investigation of FTX. 

Those who said about any problem or issue on Binance should provide a valid proof, if there is none then all of these negative thoughts are just rumors.  Auditor refusing to vouch for Binance audit probably has deeper reason why they are not doing it.

I have to say it is not really that much of a big deal compared to what we have seen with FTX, at the very least we are talking about Binance showing their papers to a place, there could be some disagreements on how the calculation should be made, but at the very least it is shown and that's what matters.

If there was a big deal like it is empty, then they would say that and it would be obvious, but since it is not empty then we know that it may or may not be 1:1 ratio, but at least it is filled a bit. This is a good thing, we should be able to use this to feel better if we want to, if you don't feel that way, just take your money out, binance is open for withdrawals.

After what happened to the ftx platform, confidence in all platforms is declining in succession.  An emerging market that is barely more than ten years old, it is only natural that management systems are not appropriate for it.  Unfortunately, users are affected by the reputation of the provider, and when the options are limited, the pressure is less.

sometimes i see these allegation topics as just childish stories. yes some lessons can be learned from them. but sometimes they are stories about "could be" and not actual events or future plans

which is where i tailor my analogies into childish concepts for those readers

however
FTX has done a event where they were caught not having assets to meet demands.
people done a bank run.
withdrawals were locked and ftx filed for bankruptcy, and evidence of theft and fraud are seen..
.. yet some people are still unsure of how legit or illegit ftx is/was

..
where as binance has not done anything (if/yet) to harm customers. and people are pitchforking it.

yes get your coins out dont use exchanges as a custodian. but i see this latest saga against binance as just revenge social drama of trying to find blame for those that lost due to ftx

EG
imagine your dad was a serial killer but a victim witnessed his crimes and got him arrested. and you lost contact with your dad. instead of realising your dad is a serial killer and deserves everything he gets, you are victim blaming the witness

its that simple
people are trying to get the victim/witness credibility put into question

i dont use exchanges as custodians so i dont care much for the social dramas personally as they cant hurt my holdings.. best case is everyone else get theres out to so you lot dont have to care either

yes be risk aware, learn what risks there are. but dont put yourself at risk

(dont hold onto your gold stars till the weekend hoping for your chocolate bar. claim your chocolate bar as soon as you earned your chore board stars. know that your moms can steal your chocolate so dont give her time to get tempted.)

I think if binance is found culprit after scrutinize this will lead to very worse outcome for cryptocurrency and it will drop the price. Binance is big and popular with trust of investors not minding it is centralize exchange so people won't have any more trust with exchange and they like to keep the coins within them and that will create dull moment for cryptocurrency. Exchange transaction help the trader alot and if binance go down, it will affect every body.

In my opinion Binance does have the best interests of its customers in mind, but investors and traders should be aware of the fact that auditors cannot verify client funds, only how they are held. As far as I can tell, this is standard for most exchanges. This doesn't mean that your funds aren't safe on an exchange, but you should pause to consider how these exchanges hold their customers' coins.

the PoR

is a data structure that shows binance customers balance is accounted for and combines to a total
also binance shows they have coin control of an alotment of coins that meet and exceed that total accounted total

..
the objections are that some beleive that it does not include the companies own private assets and liabilities.

but that is a separate account report with a separate report.

also objections about binance not revealing all its corporate entities.
again this is separate to the customer accounts/PoR stuff


the fear becomes that some hidden parent company could claim ownership of the coin control of all assets. whereby "binance" as a daughter/sister company could be sent into some legal system of administration where it locks customers from redemptions. and prevents payouts while then not honoring the use of the coin control assets to be used on those customer due to some hidden contract under the parent company that customers are not aware of


..
its a simply family 'chore board' where having 4 stars on a chore board = 1 chocolate bar reward at end of the week
where they can clearly say the kids have a total of 8 stars= 2 chocolate awards
and the big sister can show 2 chocolate bars in the fridge waiting for the end of the week.

however mommy can be malnourished(in debt) and may want to take the chocolate out the fridge to eat for herself to make her heathy. leaving the kids then under nourished. and thats the fear.

the fear that if kids complain they didnt get their chocolate and its found out the chocolate is not in the fridge. big sister(binance) as kid babysitter and the family fridge gets locked up with the kid in social services disputes(regulators)
but the parent is not disclosed/ put into a social services investigation.  and is instead sunning it up on a beach with a full tummy

I found a similar  article here
https://cointelegraph.com/news/binance-s-proof-of-reserves-raises-red-flags-report


This is quite odd. Looks like a ghost company.


And in the end, the publish all that useless garbage they call "proof of resertve" and they don't have all of it!

Binance says an audit shows proof of reserves of customer funds. But its auditor will not vouch for the reserves nor the methodology demanded by Binance.

What do you think ?

1) Is Binance manipulating the crypto industry

2) Is Binance involved in any sort of money laundering

3) Is BNB being inflated at the cost of investors/traders money

4) What will be the fate of users if Binance in any case will be scrutinized and found to be a culprit


https://mishtalk.com/economics/binances-alleged-crypto-audit-failed-not-even-its-auditor-would-vouch-for-it