The U.S. Securities and Exchange Commission (SEC) is intensifying its examination of the auditing work performed by audit firms for cryptocurrency companies, as stated by a senior official of the regulatory body in an interview with the Wall Street Journal today.
Paul Munter, the SEC’s acting chief accountant, cautioned investors to exercise caution regarding the assertions made by cryptocurrency companies. He highlighted the need for vigilance in light of the current landscape. The SEC has not promptly responded to a Reuters request for comments on the matter.
This heightened scrutiny coincides with the aftermath of the collapse of FTX, causing repercussions throughout the industry and impacting the liquidity of firms associated with what used to be one of the world’s largest cryptocurrency exchanges. Regulators in various countries have initiated investigations in response to these developments.
FTX filed for U.S. bankruptcy protection last month, and its founder, Sam Bankman-Fried, stepped down as the chief executive after Binance, a rival exchange, abandoned a proposed acquisition. The fallout from the FTX collapse has left numerous cryptocurrency firms anticipating potential consequences, with many assessing their exposure, often amounting to millions, to the distressed exchange.