Bitcoin Drops as Mazars Group Steps Back From Crypto Clients
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Reputational issues are still present in the cryptocurrency market, apparently. Bitcoin (BTC-USD) is down today, at least partly due to concerns expressed by Mazars Group, an accounting firm. Reportedly, the firm has halted its business with a number of crypto-related clients. Traders responded 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 relating to the provision of Proof of Reserves 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 Reserves Reports” seem to question whether the aforementioned cryptocurrency companies are able to demonstrate their solvency. It’s possible that Mazars Group is wary because of the disaster with now-bankrupt cryptocurrency exchange FTX.
What’s Happening With the Bitcoin Price?
As of 10:30 a.m. Eastern, Bitcoin struggled to maintain the crucial $17,000 level. It was only a couple of days ago that the crypto token’s price was above $18,000 and seemingly heading higher.
The news of Mazars Group distancing itself from several crypto clients is yet another example of the FTX debacle’s collateral damage. In the near future, there may be other financial firms drafting solvency audits and/or halting business relations with crypto businesses.
On the other hand, it’s possible that Mazars Group may resume business with Binance, KuCoin and Crypto.com at some point. If that occurs, the Bitcoin price might recover and head back toward $18,000.
As for Crypto.com, the company assured it will “continue to engage with reputable audit firms in 2023 and beyond” as it seeks “to increase transparency across the entire industry.” So, given some time and effort, these crypto companies might be able to bolster their reputations.
This will likely be an essential step in repairing the damage that FTX has done to the crypto community. Then, Bitcoin may be able to turn around and stage a recovery in 2023.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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