Bitcoin falls as Mazars Group retreats from crypto clients
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Reputational issues are apparently still present in the cryptocurrency market. Bitcoin (BTC-USD) is down today, at least in part due to concerns expressed by Mazars Group, an accounting firm. The firm has reportedly suspended its business with a number of crypto-related clients. Traders reacted to this development by pushing the Bitcoin price lower.
The cryptocurrency related clients include Binance (BNB-USD), KuCoin (KCS-USD) and Crypto.com. Mazars Group “paused its activity related to the provision of Proof of Reserve reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public,” according to CNBC.
The “Proof of Reserve reports” seem to question whether the aforementioned cryptocurrency companies are able to demonstrate their solidity. It is possible that Mazars Group is on alert due to the disaster of the now bankrupt cryptocurrency exchange FTX.
What is happening to the Bitcoin price?
As of 10:30 a.m. Eastern, Bitcoin was struggling to maintain the crucial $17,000 level. It was just a couple of days ago that the crypto token’s price was above $18,000 and seemingly on its way higher.
The news that Mazars Group is distancing itself from several crypto clients is another example of the collateral damage of the FTX debacle. In the near future, there may be other financial firms preparing solvency audits and/or ending business relations with crypto companies.
On the other hand, it is possible that Mazars Group may resume business with Binance, KuCoin and Crypto.com at some point. If that happens, the Bitcoin price could recover and move back towards $18,000.
As for Crypto.com, the company assured that it will “continue to engage with reputable audit firms in 2023 and beyond,” as it seeks “to increase transparency throughout the industry.” So, given some time and effort, these crypto companies might be able to solidify their reputation.
This will likely be an important step in repairing the damage that FTX has done to the crypto community. Then perhaps Bitcoin can turn around and stage a recovery in 2023.
At the date of publication, David Model did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
