The scope of customer inquiry included spot, options, margin, futures, financing, loan and profit accounts for Bitcoin and Bitcoin Coated (WBTC). Aside from the Bitcoin network, BTC in Ethereum, BNB Chain, and BNB Smart Chain were included in the inquiry.
As part of its Proof of Reserves pledge, Binance requested an agreed-upon procedure (AUP), or audit of limited scope, on November 22. Commenting on the findings, Mazars wrote:
“We make no representation as to the appropriateness of the Acceptable Use Policy. This AUP is not a warranty assignment. Accordingly, we do not express an opinion or an affirmative conclusion. Had we conducted additional actions, other matters that could have been reported may have come to our attention.”
As described in its procedures, Mazars independently obtained the face value of the assets of Binance clients by testing a variety of exchange-controlled wallet addresses. The validators required Binance to move the assets to specified addresses and return them for verification of proof of ownership. In addition, the company used its software to aggregate the customer data it obtained and calculate the Merkle Root Hash. This allowed Binance clients to independently verify their Merkle Leaf and encrypt it as part of the Merkle Root.
“We have complied with the relevant ethical requirements. For the purpose of this engagement, there are no independence requirements that we have to comply with.”
