SEC Increases Scrutiny For Firms Auditing Crypto

December 22, 2022

Story: Divya Sinha

As per the WSJ reports, the SEC has increased scrutiny for firms auditing crypto with concerns that investors may get a false sense of security from the company’s reports.

Paul Munter, the SEC’s acting chief accountant said in a interview  that they are warning investors to be very wary of some of the claims that are being made by crypto companies.

Munter also added that they are increasing their understanding of what’s going on in the marketplace.

Also, he detailed that if they find fact patterns that are troublesome, they will consider a referral to the division of enforcement.

Regulators are particularly concerned with proof-of-reserves as it aims for crypto companies to have sufficient assets to back their customer’s funds.

The increased scrutiny has led to at least one audit firm dumping cryptocurrency customers.

Recently, Binance proof-of-reserve audits were removed from auditor Mazars’ website.