US lawmakers reiterate concerns about 'sham' crypto firm audits to PCAOB
United States Senators Elizabeth Warren and Ron Wyden have cited the recent collapse of three major banks to call on the Public Company Accounting Oversight Board to “rein in” audits of crypto firms.
In a March 21 letter to Public Company Accounting Oversight Board chair Erica Williams, Warren and Wyden reiterated concerns over “shady audits” of crypto companies the pair raised in January, this time referencing the failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank. The two senators requested Williams respond to questions on whether improper audits and proof-of-reserve reports “may have played a direct or indirect role” in the collapse of the banks.
“You have ample authority to establish standards for auditors that require any SEC-registered auditor to only conduct audits of crypto firms that comply with existing standards for audit quality,” said the letter. “Based on the obvious threats to investors and the public interest posed by sham audits, any audits and reviews of crypto firms done by SEC-registered auditors must maintain a high level of scrutiny. Otherwise, these sham audits must be addressed by PCAOB.”
Congress and the Fed weakened stress tests and other rules to prevent big banks from taking on too much risk and crashing the economy — all so banks could make bigger profits. Banks can't be trusted to regulate themselves. Congress and our regulators need to step up. https://t.co/AVcFr7g3GB
Warren and Wyden suggested that defunct crypto exchange FTX, currently in bankruptcy court for Chapter 11 proceedings, could have impacted the events around Silvergate and Signature, given the firm “received sham financial reviews” by auditors registered with the PCAOB:
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