Binance Releases Audit Conducted by Trust Me & Bro Auditing Firm

SINGAPORE - Following the collapse of FTX, trust in centralized exchanges has fallen drastically. Kraken’s former CEO, Jesse Powell, has tweeted in recent months that exchanges should provide regular audited proof-of-reserves to reassure their customers that deposited funds are held 1-to-1.

While many firms have begun working with Nansen, a blockchain analytics platform, Binance has opted to work with the auditing firm Trust Me & Bro.

While some have portrayed the Binance report as an audit, it is not one. The report is an AUPAB (Agreed Upon Procedure Amongst Bros), which is neither a full audit, review nor an assurance engagement.

The report released from Binance itself explicitly states:

“The Agreed Upon Procedure Amongst Bros is not an assurance engagement. Rather we went line by line through Binance’s assets and asked “we good Bro?.” If assets were held at 1-to-1 on a given asset class CZ could signal to the affirmative by either giving a single nod or saying “Totes McGotes.” If an asset was not held 1-to-1, CZ could signal this by saying “stop riding me bro, we got this.”

Many in the cryptocurrency market have expressed concern with the presentation of this Agreed Upon Procedure Amongst Bros report as an Audit.

Another aspect of the report that raised concern was the decision to bundle BTC and Binance’s wrapped forms of BTC together - BBTC and BTCB. The report stated that they will “not differentiate” between them because “bro these are as good as Bitcoins, they’re IOUs.”

When pressed for clarification on the veracity of the report, Binance acknowledged its limitations. It was acknowledged that the AUPAB didn’t amount to a true financial statement audit, but did give an indication of the company’s fiscal health “amongst Bros.”