The US Securities and Exchange Commission (SEC) is calling on cryptocurrency investors to pay more attention to audit firms that do works for crypto businesses, the Wall Street Journal has learned, citing a senior official of the regulator.
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Paul Munter, SEC's Acting Chief Accountant, said that investors should be very "wary of some of the claims that are being made by crypto companies." He declined to name companies that might be under regulatory scrutiny due to audits of their reserves.
The warning comes shortly after the crypto market faced a liquidity crunch, triggered by FTX's collapse. As iHodl earlier reported, Mazars Group, a French consulting company, deleted a Proof of Reserves report for cryptocurrency exchange Binance and stopped working with other crypto businesses, citing "concerns" regarding the way such sort of reports "are understood by the public."
The consulting company also stopped offering services to KuCoin and Crypto.com. Although Mazars pointed out that proof of reserves reports are "performed in accordance with Reporting Standards," it added that these reports "do not constitute either an assurance or an audit opinion on subject matter."
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