### FUD about Binance has been spreading after crypto users questioned the 'audit' of Binance reserves. 

After the shocking crash of the entire FTX empire, and the unfolding domino effect of other crypto entities unrelated to FTX but transacting with FTX, crypto users remain on edge about what the next big 'crash' will be. 

The crypto community is understandably nervous with regard to Binance because it is the largest crypto exchange by far. Coingecko states that the 24 trading volume on Binance is over $11B. 

The second largest crypto exchange, Coinbase, comes at a distant second with 24 hour trading volume of over $1B. To boost confidence in the exchange, Binance has been working quickly to add transparency to its stash of crypto reserves. 

Just days after FTX declared bankruptcy, Binance shared addresses of what it described as the wallets holding their reserves. The response was mixed with many users praising Binance for adding transparency. 

Binance was criticized because the wallet only showed addresses but users still had no way of understanding what the liabilities are. On December 7, 2022, Binance published its proof of reserves audit conducted by Mazars Group. 

The reactions were again mixed as some crypto users celebrated the affirmation that Binance backs crypto accounts 1:1 - that for every 1BTC deposited by a customer, the BTC reserves increase by 1. Others were not as excited even calling the audit a 'pseudo audit' or 'fake audit'. 

Kraken offered this [definition](https://www.kraken.com/proof-of-reserves) for proof-of-reserves:

"A Proof of Reserves (PoR) is an independent audit conducted by a third party which seeks to ensure that a custodian holds the assets it claims to on behalf of its clients." 

The Mazars report had disclaimers that they followed an "agree upon procedure." The disclaimer begs the question of the independence given to Mazars in performing the audit. 

Some of the earlier responses to the Proof of Reserves released by Binance (prior to the full audit) were a criticism that it was not accompanied by data on liabilities. When the full report was released showing liabilities, the criticism shifted to how the Proof of Reserves audit did not show strong internal financial controls, as well as on the "completeness" of the audit. 

FUD about Binance has been spreading after crypto users questioned the 'audit' of Binance reserves. 

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