We’re working hard at comprehending what is taking place in this industry” Paul Munter, SEC’s acting chief accountantĪdditionally, if any concerning patterns emerge, they will not hesitate to refer such cases for enforcement action. In an interview with the Wall Street Journal, the SEC’s acting chief accountant Paul Munter sounded a clear warning to investors, urging them to be suspicious of unfounded assertions from crypto companies. According to one of the officials at this regulatory body, they are worried investors may be misled by reports from these firms, which would lead them to have a false sense of security. In an unexpected turn of events, the SEC has begun to investigate and increase its oversight of active accounting firms in the cryptocurrency sector. Unfortunately, other CEXs followed suit but experienced much condemnation from members within cryptocurrency communities – dubbing it ‘Fraudit’ (a combination of fraud and audit). They even hired Mazars, an esteemed accounting firm, to affirm the assets kept in store. Binance immediately took action to restore investors’ confidence and publicized its evidence of reserves. SEC is not convinced with accounting firms in the crypto marketĪfter the crypto exchange platform fell apart, investors were shaken with doubt. He declared that there was a “complete failure in corporate controls” and an “absolute lack of dependable financial information.” His perspective conflicted with those put forth by the accounting firm. The accounting company’s declaration countered the remarks given by John Ray III, who had just taken control of FTX. Although the accounting firm that conducted the audit issued a statement claiming that FTX’s financial statements were “fairly stated,” they still faced criticism for not detecting any red flags with this company’s finances. In recent months, auditing firms have been under scrutiny by industry observers, analysts, and investors following the failure of the multi-billion crypto firm FTX. Securities and Exchange Commission (SEC) is beginning to audit firms that work with crypto companies as part of their mission. With its intent to counteract cryptocurrency, the U.S.
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