Auditing firm Mazar cuts off cooperation with many of the largest crypto companies in the world. – not a sign of health, says the analyst.
An already strong crypto market gets another bad news on Friday.
French accounting firm Mazar, which has done accounting tasks for some of the world’s largest crypto operators, has suspended all business with crypto firms.
Mazar has done assignments for giants Binance, KuCoin, and Crypto.com, as well as other crypto companies.
This happens after Mazar has released Proof of Reserve reports to all the crypto companies involved. It is a report that simply explains the values that companies stand for.
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Not seeing signs of trust
According to an email from Mazar, the company is concerned that they saw no signs of confidence returning to the market following the Proof of Book report. bloomberg.
Mazar has indicated that it will temporarily stop working with crypto clients globally. The Binance spokesperson added that it includes Crypto.com, KuCoin, and Binance CNBC.
The news is another blow to the cryptocurrency, which recently fell almost in unison when cryptocurrency exchange FTX collapsed.
Mazar has yet to comment publicly on the matter, but has announced that he will issue a statement later.
Not like FTX
Vetle Lunde is an analyst and works for Norwegian cryptocurrency company Arcane Crypto.
Recently, the collapse of FTX has created fear and what I call a healthy skepticism about cryptocurrency holdings on other exchanges, says Lunde.
FTX crashed amazingly. Within a few months, the values on the exchange, on which large amounts of cryptocurrency were traded, completely evaporated. The owner and founder behind the company, Sam Bankman-Fried, is now under investigation for gross fraud.
Lund stresses that the situation with Binance and other crypto giants is very different from what happened with FTX.
Mazar’s problem isn’t that they don’t have an overview of customers, but that they’ve only done certain tasks for crypto companies, and so haven’t done a full audit, he explains. In contrast, with Binance, you have good transparency, which means you have good control over how much value they hold, the analyst believes.
Bitcoin and other cryptocurrencies fell in value on Friday, but this is more related to the global economy and the US central bank’s hike in the main interest rate, Lundy believes.
– He says that the collapse of prices today and yesterday is largely related to the US stock market.
Not a sign of health
A survey conducted by Arcane and Eyr earlier this year showed that more than 400,000 Norwegians own cryptocurrency, and among those under the age of 40 there are more crypto holders than stock owners.
As a result, several thousand Norwegians have lost large amounts of cryptocurrency in the past year. A year ago, one bitcoin was worth 450,000 NOK. Today it is worth NOK 165,400.
The cryptocurrency’s decline coincided in many ways with the rest of the global economy, yet the loss in value was even greater.
– It is not a sign of the health of the industry, and it is not what the industry needs now. What we need now is transparency from the established traditional players. He says that what is happening now is unfortunate.
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Believe in the boring year of 2023
The economy is going through difficult headwinds. Many economists believe that the United States is heading for a recession, which will have ripple effects throughout the global economy.
Lunde also believes that the cryptocurrency market will face hard times, describing the future prospects as “dull.”
– I think that the market, if it does not reach the bottom, is on the way to finding it. It will likely take several months before bitcoin and cryptocurrencies recover from this fall.
– But in the long term do you expect to return to the same level?
Certainly, the values are likely to return to the same height. But then we’ll probably go further than 2023, he says.
The basic idea of cryptocurrency is that it should be decentralized. Thus, the long-term aspiration is that Bitcoin values should not be greatly affected by interest rate hikes and monetary policy led by central banks.
Lunde believes this will happen, but the months and years that have passed have somewhat hindered development.
– I think the correlations between cryptocurrencies and US stocks will go down, he says.
Now one bitcoin is worth just under $17,000, or roughly 166,000 kronor. Lunde predicts that this is where the bottom will be, and there will now be less trading activity in Bitcoin. He believes that this may lead to the cryptocurrency not following stock market developments closely in the future.
In such a scenario, I think Bitcoin would be more exempt from the exchange, he says.
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