Page Nav

HIDE

Breaking News:

latest

Ads Place

Report: SEC Heightens Probe Into Auditors Servicing Crypto Exchanges

https://ift.tt/ojGMpi8 According to the U.S. Securities and Exchange Commission’s Paul Munter, the agency’s acting chief accountant, the ...

https://ift.tt/ojGMpi8

According to the U.S. Securities and Exchange Commission’s Paul Munter, the agency’s acting chief accountant, the U.S. regulator is monitoring proof-of-reserves (POR) more closely. “We’re warning investors to be very wary of some of the claims that are being made by crypto companies,” Munter explained to the Wall Street Journal (WSJ) on Dec. 22.

SEC Official Warns Investors Should Be ‘Wary’ of Proof-of-Reserve Audits and Crypto Exchange Claims

U.S. regulators, and more specifically the Securities and Exchange Commission (SEC), are looking more closely at proof-of-reserves (POR) these days following the collapse of FTX. Speaking with the WSJ on Thursday, SEC’s acting chief accountant, Paul Munter, explained that investors should not put much faith in POR audits and claims. SEC is concerned that investors “may be getting a false sense of reassurance from the firms’ reports,” the WSJ report detailed.

“We’re warning investors to be very wary of some of the claims that are being made by crypto companies,” Munter explained. “Investors should not place too much confidence in the mere fact a company says it’s got a proof-of-reserves from an audit firm,” the SEC accountant stressed. Munter continued:

[A POR audit] is not enough information for an investor to assess whether the company has sufficient assets to cover its liabilities.

The commentary from Munter follows the POR concept gaining traction among crypto exchanges since FTX collapsed. Companies like Okx, Binance, Crypto.com, Huobi, and others have released POR audits but some were met with controversy. Furthermore, on Dec. 16, Bitcoin.com News reported on the accounting agency Mazars Group after it revealed it would no longer provide crypto exchange audits. Binance’s POR audit completed by Mazars was also removed from the web.

“We are increasing our understanding of what’s going on in the marketplace,” Munter told the WSJ. “If we find fact patterns that we think are troublesome, we will consider a referral to the division of enforcement.”

Additionally, after Mazars Group said it would not offer POR audits to crypto exchanges, a spokesperson for the auditing firm BDO said that week it is contemplating which kinds of customers to take on. University of Texas professor Jeffrey Johanns believes auditing firms are doing the right thing by being reluctant to offer crypto firms auditing services. “The Big Four firms have…rightly decided the risks [of auditing crypto companies] are extremely high,” Johanns told the WSJ.

What do you think about the SEC’s acting chief accountant and his comments about POR audits? Let us know what you think about this subject in the comments section below.



from Bitcoin News
via RiYo Analytics

No comments

Latest Articles