SEC targets crypto auditors looking for more rigorous scrutiny

The SEC is stepping up its scrutiny of crypto auditors as it continues to wage war on the digital asset industry.

In a recent spate of anti-crypto articles, The Wall Street Journal reported that the work that accounting firms do for crypto companies continues to be analyzed.

According to the financial regulator, there is concern that these crypto audits could give investors a false sense of security. Paul Munter, the SEC’s Acting Chief Accountant, said:

“We caution investors to be very cautious about some claims made by crypto companies.”

The SEC has long claimed to be acting on behalf of investors, but its enforcement efforts to crack down on the crypto industry appear to be doing more harm than good. Munter even alluded to it, adding, “If we find patterns of fact that we find problematic, we will consider a referral to the Department of Enforcement.”

SEC: Don’t trust the audits

In addition, many crypto companies are based abroad and therefore do not fall under the jurisdiction of the SEC. However, they remain committed to providing audits and proof of reserve to reassure nervous customers and investors.

Last week, accounting firm Mazars, which reported on Binance’s reserves, halted all further work for crypto clients, citing increased auditing.

Earlier this week, Binance.US CEO Brian Shroder assured clients that his exchange is ready to process every last payout and that assets are fully secured.

The SEC is concerned about these reserve evidence reports because many lack additional financial details, the report added. The SEC attorney continued to advise investors not to pay too much attention to these scrutiny:

“Investors shouldn’t put too much faith in the mere fact that a company says it has a reserve record from an accounting firm.”

In late November, accounting firms rated crypto clients at high risk following the collapse of FTX.

No winning with the SEC

It seems crypto companies can’t win over American regulators. They will be attacked for not being audited and will be attacked again for providing evidence of reserve reports.

The SEC is unlikely to give up until the industry is crushed or transformed into traditional finance and banking.