Auditors Spurn Crypto After FTX, Misleading Reserve Estimates

January 04, 2023

Instead of offering a lifeline to crypto firms, the practice of vetting collateral triggered renewed scrutiny from regulators and provided fresh ammunition for auditor critics. Mazars Group, Marcum LLP, and Armanino LLP have said they would reconsider their crypto industry work after the implosion of FTX and a flurry of bankruptcies including bitcoin miner Core Scientific Inc. created panic in the market. Pulling back on crypto could limit the firms’ reputational and legal risks that could undermine investor confidence in work auditors provide for their publicly traded clients. Deloitte, Ernst & Young, KPMG, and PwC, behemoths of the audit industry, have generally steered clear of providing assurance services for crypto-involved companies. Backlash could spill over and taint the investor confidence in auditors work for their public company clients.

The source of this news is from TaxBit