Colin Wu Responds to Binance’s Notification on POR Audit

Colin Wu, the Chinese Reporter, on his Twitter account, Wu Blockchain, responded to Binance’s announcement that the company has been consolidating funds from the customers’ wallets for the “next phase of our [their] POR audit”.

Wu tweeted that the use of the word “audit” is inaccurate while the exchange conducts POR verification:

It is important to note that the use of the word “audit” is inaccurate when Binance and other exchanges conduct POR verification. Audit firm Mazars is involved in the AUP engagement, «An agreed-upon procedures engagement is not an audit, review or other assurance engagement». https://t.co/S5iDAKCcNU

— Wu Blockchain (@WuBlockchain) December 10, 2022

According to the reports, the global, financial audit, tax, and advisory firm, Mazars, has been assigned with the auditing of Binance. In the reports, the firm announced that “at the time of assessment, Mazars observed Binance exchange controlled in-scope assets in excess of 100% of their total platform liabilities”.

Notably, Wu stated that Mazars is “involved in the AUP engagement” and referred to the statement in the Final Pronouncement of The International Standard on Related Services 4400 (ISRS 4400), to corroborate his idea that “audit” is not the proper word there:

An agreed-upon procedures engagement is not an audit, review, or other assurance engagement. An agreed-upon procedures engagement does not involve obtaining evidence for the purpose of the practitioner expressing an opinion or an assurance conclusion in any form.

On December 9, Binance tweeted that due to the auditing, there would be an increase in ETH gas fees, and the number of transactions into “Binance’s hot wallets” as an awareness for the community.

Significantly, there arose a lot of queries and worries regarding the post among the investors. Some of the tweeters questioned if “it’s a clear sign of problem?”, referring to a previous tweet of Binance in which the CEO stated that “if an exchange has to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems”.

Source