PCAOB Receives Pressure to Act as Crypto Firms’ Audit Supervisor
The Public Company Accounting Oversight Board (PCAOB) is facing pressure to act as the supervisor for auditing cryptocurrency firms. This call comes at a time when most cryptocurrency businesses are not under the jurisdiction of the PCAOB.
According to the recent Wallet Street Journal article, the call comes at a time when the Securities and Exchange Commission (SEC) is tightening its grip on cryptocurrency firms. This is mainly due to the fact that cryptocurrencies in the United States are mostly unregulated.
Moreover, it should also be noted that PCAOB is overseen by the SEC. The SEC is also reportedly worried about the “proof-of-reserve” reports that were a follow-up to the collapse of the FTX exchange. Regarding this issue, Douglas Carmichael, a former PCAOB chief auditor stated:
It is the Wild West in the sense that nobody is requiring audits of financial statements and no one is specifying the standards that ought to apply to proof-of-reserves reports. It’s a big concern when investors get a report from an audit firm that seems to provide assurance when it doesn’t.
PCAOB is the board that oversees audits and sets standards for public companies and broker-dealers registered with the SEC. The board also formed a team in 2019 to focus on cryptocurrency industry audits.
The SEC had also been eyeing the cryptocurrency realm, as it recently imposed its measures on Kraken and cryptocurrency staking. The regulator has also been trying to bring cryptocurrencies under its wing, as is evident from the Ripple case, which has been dragging on for over two years.