The U.S. Securities and Exchange Commission (SEC) has stepped up scrutiny of the work that audit firms do for cryptocurrency companies.
Last month, FTX filed for US bankruptcy protection, and its Founder Sam Bankman-Fried resigned as chief executive after rival exchange Binance backed out in a proposed buyout. Since then, many crypto firms have fallen into a crisis caused by the collapse of FTX. One of the prominent issues was the decrease in confidence in the liquidity of the stock markets. The reserve-sharing trend started with Binance, but when issues with controls arose, the SEC stepped up.
SEC Examines Auditors’ Cryptocurrency Research
A senior official of the regulator told the Wall Street Journal on Thursday that the U.S. Securities and Exchange Commission (SEC) has increased its scrutiny of the work that audit firms do for crypto companies.
Many of the audit firms are closely managed or based offshore and are therefore unlikely to fall within the remit of the regulator. In addition to sending an effective warning to audit firms that do not want to conflict with their regulators, the SEC also alarms investors.
Paul Munter, Acting Chief Accountant of the SEC, in an interview with the magazine; “We warn investors to be very wary of some of the claims made by crypto companies,” he said.
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