The U.S. Securities and Exchange Commission (SECGov) is increasing its scrutiny of audits of cryptocurrency companies while warning investors and audit firms that proof of reserve reports are not enough, the Wall Street Journal reported. By Amitoj
“Investors should not place too much confidence in the mere fact a company says it’s got a proof-of-reserves from an audit firm,” said Paul Munter, the SEC’s acting chief accountant. Having such a report “is not enough information for an investor to assess whether the company has sufficient assets to cover its liabilities,” he added.across the world announced they would publish transparency reports or Merkle tree proof-of-reserves to reassure spooked investors.
The SEC is warning both investors and audit firms that if it finds troublesome"fact patterns," the watchdog will consider a referral to the division of enforcement, according to Munter. The development assumes significance as questions have been swirling regarding Binance, the largest crypto exchange by trading volume, that did
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