The investor Michael Burry, who forecast the 2007 mortgage crisis, described the audits of crypto-exchange balance sheets by auditing firms as senseless.
“This is a problem. When in 2005 I started using a new type of credit default swaps, our auditors were learning on the fly. This isn’t very good. The same goes for FTX, Binance and others. Auditing is, essentially, meaningless,” wrote Burry.
The investor commented on news of ending services for crypto companies by the French auditor Mazars.
Earlier, the firm conducted a reserve audit of the Crypto.com platform and Binance’s bitcoin balances.
After publication of the report on the latter, experts said it did not reassure users about the safety of assets. In their view, Mazars’ work with the exchange was not a full audit.
John R. Stark, the head of John Reed Stark Consulting, said that, as a former SEC employee, he saw \”alarming signals\” in the audit results.
Following the critique, Binance faced a significant outflow of funds. The exchange also had withdrawal problems with the USD Coin (USDC) in some networks.
Against this backdrop, Binance chief Changpeng Zhao was forced to deny rumors about a lack of liquidity on the platform.
CryptoQuant experts confirmed the data in Mazars’ report on the exchange’s liabilities and bitcoin reserves.
Burry was among the first to forecast the US subprime mortgage crisis. He bet the entire Scion Capital hedge fund against mortgage-backed CDO and profited from the crisis.
In 2015, based on Michael Lewis’s book about those days, the film \”The Big Short\” was released.
In July, Burry predicted the continuation of the bear market and further declines in Bitcoin’s price.
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