{"id":75993,"date":"2023-03-22T14:11:36","date_gmt":"2023-03-22T12:11:36","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=75993"},"modified":"2025-09-10T14:49:33","modified_gmt":"2025-09-10T11:49:33","slug":"us-senators-urge-crackdown-on-fake-audits-of-crypto-firms","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/us-senators-urge-crackdown-on-fake-audits-of-crypto-firms\/","title":{"rendered":"US Senators Urge Crackdown on ‘Fake Audits’ of Crypto Firms"},"content":{"rendered":"

US Senators Elizabeth Warren and Ron Wyden urged authorities to act against ‘fake audits’ of crypto firms. The matter is outlined in a letter<\/a> from the politicians.<\/p>\n

In Warren’s view, this treatment of critical processes has harmed the banking sector, with reference to the recent collapses of Silvergate Bank<\/a>, Signature Bank<\/a> and Silicon Valley Bank<\/a>.<\/p>\n

\n

“Fake audits mislead the public and threaten the integrity of the auditing industry, and, as we now know, potentially the banking and financial systems,” she said.<\/p>\n<\/blockquote>\n

PCAOB<\/span>, overseen by the Securities and Exchange Commission (SEC), acknowledged<\/a> the problem before the Senate.<\/p>\n

PCAOB Chair Erica Williams expressed concerns that the auditing firms overseen by her organisation conduct fake audits even for companies not under the regulator’s supervision.<\/p>\n

Warren noted that authorities should apply political pressure and approach the issue with greater responsibility.<\/p>\n

In November 2022, Binance was among the first to introduced<\/span> the Proof-of-Reserves function, aimed at ensuring the transparency of user funds custody.<\/p>\n

The exchange team used Merkle Tree to verify on-chain data. Subsequently, developers implemented in the system<\/span> the ZK-SNARK<\/span> tool to enhance security and privacy.<\/p>\n

Binance’s example was followed by a number of other platforms, including Huobi<\/a>, Bitfinex<\/a>, Bybit<\/a> and OKX<\/a>. CEO Bitstamp US Bobby Zagotta admitted<\/span> that the procedure would restore retail investors’ confidence in trading platforms.<\/p>\n

However, Kraken co-founder Jesse Powell questioned<\/span> the effectiveness of Binance’s checks. In his view, the published data do not attest to the safety of users’ assets.<\/p>\n

A similar view was voiced by a number of experts surveyed by The Wall Street Journal.<\/p>\n

In December, SEC representative Paul Manter urged<\/span> investors to tread very cautiously regarding audits of crypto exchanges’ reserves. He argued that such checks do not always reveal the true financial state of the company.<\/p>\n","protected":false},"excerpt":{"rendered":"

Senators Elizabeth Warren and Ron Wyden urged authorities to act against ‘fake audits’ of crypto firms. The matter is outlined in a letter from the politicians.<\/p>\n","protected":false},"author":1,"featured_media":75994,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[967,36,26],"class_list":["post-75993","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-audit","tag-regulation","tag-usa"],"aioseo_notices":[],"amp_enabled":true,"views":"22","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/75993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=75993"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/75993\/revisions"}],"predecessor-version":[{"id":75995,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/75993\/revisions\/75995"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/75994"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=75993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=75993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=75993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}