Tezos Foundation, the company behind XTZ token has announced that an external financial audit will be conducted by PricewaterhouseCoopers (PwC). Tezos says that they are set to become the first blockchain organization to be audited by a ‘big-four’ firm.
This move aims to bring transparency to the how the company operates, which should address some of the controversies it has faced after its initial coin offering (ICO) finished around a year ago. After gathering $232 million through an ICO, the company was accused on a number of occasions of delaying the token launch on purpose, while internal disputes between the founders lead the organization to face several changes in leadership. Tezos also faced several lawsuits for non-compliance with U.S. Securities and Exchange Commission (SEC) regulations, as it was argued that tezos tokens should be treated as securities.
Earlier, tezos has launched its beta network with a limited number of validators acting as part of the proof-of-stake mechanism. Of the 26 ‘bakers’, 8 are part of the foundation, but the overall number of validators is expected to grow further.
This moves also follows an announcement that PwC has launched its auditing service for the crypto industry. The company later purchased a stake in a anti-counterfeiting blockchain startup VeChain.
WHY IS IT IMPORTANT?
1. For the first time a well known financial auditor will evaluate a large scale cryptocurrency business that should set the benchmark for how blockchain backed organizations should be supervised.
2. Previously, stablecoin Tether project came under much scrutiny for failing to provide an official financial audit. Critics claimed that because the USDT token is backed by the firm at 1 to 1 against the U.S. dollar, a selective one day audit by a law firm is not sufficient to prove its financial stability of the firm.