US Senators urge PCAOB to enhance audits on crypto companies

Crypto Legislation to Emerge in US House within Two Months

In this post:

  • US Senators Warren and Wyden are urging the PCAOB to impose stricter auditing requirements for SEC-registered auditors of cryptocurrency companies.
  • They suspect that fraudulent audits may have contributed to the failures of defunct cryptocurrency exchanges FTX, Silvergate, and Signature banks.
  • Warren has been a vocal critic of the digital asset market and blames regulatory failures for the recent bank failures.

US Senators Elizabeth Warren and Ron Wyden of the United States have urged the Public Company Accounting Oversight Board to “rein in” examinations of cryptocurrency companies in light of the recent failure of three significant banks.

Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, and other senators were informed of the potential issue with crypto auditing by the Public Company Accounting Oversight Board (PCAOB), which is authorized, supervised, and funded by audited public firms.

In a January answer letter made public by the lawmakers, PCAOB Chair Erica Williams expressed worry when the auditors her agency supervises perform sham audits, even for firms whose audits normally fall outside of our jurisdiction.

Williams noted,

“Unfortunately, the PCAOB confronts statutory limitations when it comes to supervising the audits of specific cryptocurrency companies.”

Given that the company “received sham financial reviews” from auditors registered with the PCAOB, Warren, and Wyden hypothesized that defunct cryptocurrency exchange FTX, which is presently in bankruptcy court for Chapter 11 proceedings, may have had an impact on the events surrounding Silvergate and Signature.

The two senators asked Williams to brief them at the staff level on March 31 and to reply to their inquCalls for increased regulatory oversight and quality standards in Cryptocurrency audit.

US calls for increased regulatory oversight Cryptocurrency Audits

In the letter, it was said that

“You have sufficient authority to create requirements for auditors that compel any SEC-registered auditor only to perform audits of crypto businesses that conform with existing standards for audit quality.” 

In addition, the letter highlighted that any audits and inspections of cryptocurrency enterprises conducted by SEC-registered auditors must maintain a high level of scrutiny due to the clear risks to investors and the public interest posed by sham audits. Otherwise, PCAOB must address these fraudulent audits.

Warren, a vocal opponent of many facets of the digital asset market in Congress, has been blaming the failure of the aforementioned institutions in part on a lack of regulatory monitoring. On March 15, she asked Federal Reserve chairman Jerome Powell to step aside from any investigation into the regulatory mistakes that caused Silicon Valley Bank to fall.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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