Michael Burry: Crypto Reserve Vetting is ‘Essentially Meaningless.

• Michael Burry commented on the news that Binance’s accountant had stopped all work for crypto firms.
• Legendary investor “Big Short” described proof of reserves as “essentially meaningless,” referring to it as “essentially meaningless”.
• Burry was one the first investors to predict the subprime mortgage crisis.

Michael Burry is a legendary investor who saw the subprime mortgage crisis. He is wary about the so-called proofs of reserves that crypto exchanges claim to have since FTX crashed. 

The “Big Short”, a former hedge fund manager tweetedFriday’s reviews of digital holdings at a firm were “essentially meaningless” 

Burry tweeted Friday, “In 2005, when I began using a new type of credit default swap,” That’s not a good thing. Same goes for FTX, Binance, etc. The audit is basically meaningless.”

—Cassandra B.C. (@michaeljburry) December 16, 2022

The tweet was a comment on the news that Mazars, a French accounting firm used in the space by Binance and other larger players, had stopped all work with crypto-related customers on Friday.

Binance, in particular, has emphasized proof of reserves in an effort to increase transparency amid the FTX scandal. 

However, critics claim that proof of reserves does not provide a complete picture about a company’s risks and may be misleading.

Following the collapse in FTX, the once $32 Billion empire that Sam Bankman Fried started, there’s been a loud cry to audit major crypto firms.

FTX filed for bankruptcy after a Coindesk reportIt was revealed that FTX’s native currency FTT was being used by Bankman-Fried’s quant trading company Alameda Research. As a result, the embattled company lost $8 billion in customer money.