SEC Says Accounting Firms Face Legal Risk Haveng Cryptocurrency Clients
Moving money or capital raises concerns and inspection. For the financial system, this process is known as audits. As the growing largely unregulated cryptocurrency markets require greater scrutiny, the US Security and Exchange Commission (SEC) recently voiced their apprehension that accounting firms could enter into legal liability if they do not audit properly. On July 27th, Chief Accountant at SEC, Paul Munter, spoke about crypto accounting firms and the need for thorough reviews. While recognizing purpose of the process as notionally an audit, he warned it was “neither as rigorous nor as comprehensive as a financial statement audit.”
The consequence of such innocent-like audits not returning true insight could be illuminated by last year’s collapse of FTX, one of the crypto industry’s most prominent players. Such news led other leading firms to imagine the value of hiring auditing firms to prove their bookings, with Mazars and KuCoin being two of these signups.
Unfortunately, however, Mazar recently abandoned this practice to causing an authoritative reversal in the market, while the SEC, consequently, determined their suits. Seeking to decree the responsibility of accounting firms, they reminder investors that review guarantee can become in question. That is, mitigating parties could from “anti-fraud laws” for any events of abetting customers’ deception. All together, crypto accounting firms must ask themselves: “If clients look to lie, how liable am I?”
