Michael Burry Says Crypto Reserve Verification Is “Essentially Meaningless”

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Michael Burry commented on the news that the accountant who produced Binance’s reserves proof report would stop all work for crypto firms. The legendary “Big Short” investor has described proof of reserves, which has been popularized since the implosion of FTX, as “essentially meaningless.” Burry was one of the first investors to predict the subprime crisis. LoadingSomething is being loaded.

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Michael Burry, the legendary investor who predicted the subprime mortgage crisis, is wary of the so-called proof of reserves that crypto exchanges have been touting since the FTX crash.

The former “Big Short” hedge fund manager tweeted on Friday that such criticism of a company’s digital holdings is “essentially meaningless.”

“In 2005 when I started using a new type of CDS, our listeners were learning on the job,” Burry tweeted on Friday. “That’s not a good thing. Same goes for FTX, Binance, etc. Auditing basically makes no sense.”

Cassandra BC (@michaeljburry) December 16, 2022

The tweet came as a comment on news that Mazars, the French accounting firm used by Binance and other bigger players in the space to produce proof of reserve reports, halted all work with related clients on Friday. to cryptography.

Binance in particular has touted proof of reserves as a way to assure customers that their assets are secure in a bid to boost transparency amid the FTX scandal.

But critics said proof of reserves does not provide a full picture of a company’s risks and can be misleading.

There has been a thunderclap for audits of major crypto firms following the collapse of FTX, the once $32 billion empire launched by Sam Bankman-Fried.

FTX filed for bankruptcy last month after a Coindesk report revealed that FTX’s native FTT token was being used to support Bankman-Fried’s quantitative trading firm, Alameda Research. As a result, the beleaguered company lost $8 billion in cash for its customers.

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