Report: SEC Heightens Probe Into Auditors Servicing Crypto Exchanges

According to the U.S. Securities and Exchange Commission’s Paul Munter, the agency’s acting main accountant, the U.S. regulator is monitoring proof-of-reserves (POR) much closely. “We’re informing investors to beryllium precise wary of immoderate of the claims that are being made by crypto companies,” Munter explained to the Wall Street Journal (WSJ) connected Dec. 22.

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

U.S. regulators, and much specifically the Securities and Exchange Commission (SEC), are looking much intimately astatine proof-of-reserves (POR) these days pursuing the illness of FTX. Speaking with the WSJ connected Thursday, SEC’s acting main accountant, Paul Munter, explained that investors should not enactment overmuch religion successful POR audits and claims. SEC is acrophobic that investors “may beryllium getting a mendacious consciousness of reassurance from the firms’ reports,” the WSJ study detailed.

“We’re informing investors to beryllium precise wary of immoderate of the claims that are being made by crypto companies,” Munter explained. “Investors should not spot excessively overmuch assurance successful the specified information a institution says it’s got a proof-of-reserves from an audit firm,” the SEC accountant stressed. Munter continued:

[A POR audit] is not capable accusation for an capitalist to measure whether the institution has capable assets to screen its liabilities.

The commentary from Munter follows the POR conception gaining traction among crypto exchanges since FTX collapsed. Companies similar Okx, Binance, Crypto.com, Huobi, and others person released POR audits but immoderate were met with controversy. Furthermore, connected Dec. 16, Bitcoin.com News reported connected the accounting bureau Mazars Group aft it revealed it would nary longer supply crypto speech audits. Binance’s POR audit completed by Mazars was besides removed from the web.

“We are expanding our knowing of what’s going connected successful the marketplace,” Munter told the WSJ. “If we find information patterns that we deliberation are troublesome, we volition see a referral to the part of enforcement.”

Additionally, aft Mazars Group said it would not connection POR audits to crypto exchanges, a spokesperson for the auditing steadfast BDO said that week it is contemplating which kinds of customers to instrumentality on. University of Texas prof Jeffrey Johanns believes auditing firms are doing the close happening by being reluctant to connection crypto firms auditing services. “The Big Four firms have…rightly decided the risks [of auditing crypto companies] are highly high,” Johanns told the WSJ.

What bash you deliberation astir the SEC’s acting main accountant and his comments astir POR audits? Let america cognize what you deliberation astir this taxable successful the comments conception below.

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