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SEC Expands War on Crypto to Auditors

June 2024

The SEC seems to have had a bone to pick with crypto for a while now, and recent news suggests that it intends to continue its attack on coins and exchanges, and now other entities  surrounding the industry. 


Whilst there was some positive news for crypto when Ripple’s XRP token was found not to be a security (in some circumstances), the SEC has continued to levy charges and push lawsuits against cryptocurrencies and exchanges as it claims most crypto to be a security that should fall under its jurisdiction. Whilst the SEC and other regulators have a huge role to play in ensuring the public are kept safe from fraud and the effects of malpractice, many feel that the SEC is going too far or exceeding its remit in an attempt to curb the use and growth of crypto. 

 

A recent target in the SEC’s sights however, does not focus on a crypto company or crypto exchange, but an auditor. In a recent press release, the SEC stated that it had found issues in more than 200 audits, reviews, and exams that were carried out by accounting firm Prager Metis which, as noted by various publications, have previously carried out accounting work for FTX. The biggest crypto debacle of the past few years could end up dragging even more down in its wake. 

Although there has been a history of malicious actors trying to take advantage of cryptocurrencies, it should be noted that the blockchain technology that most are built on was designed to be immutable and transparent - a boon for accounting and accountability, and highly unsuitable for fraud or other criminal activity, as has been evidenced time and time again. Blockchain technology provides an excellent route to a world with improved customer protections and fraud-prevention, so it can be puzzling to understand why regulators around the world haven’t yet embraced its potential and realized the ways in which it can be employed, particularly in the US. Fortunately, there are many that recognize the benefit of crypto and blockchain in conjunction with regulations, and Blockpass is one of them. 

Blockpass provides a vital part of the regulatory system through its identity verification services, enabling KYB, KYC and AML checks both for those in the crypto sphere and those outside. With on-chain and off-chain solutions, which can be tailored to any blockchain and varying customer needs, Blockpass can help businesses, customers and regulators alike by providing clear, immediate, verifiable proof of the suitability of those involved with a regulated service. 

The Blockpass platform is fully automated and hosted in the cloud, with no integration or setup fee. Businesses can sign up to the KYC Connect console in a matter of minutes, test out the service, and start conducting identity documents verification, KYC and AML checks. Take a look at Blockpass' groundbreaking crypto compliance solutions:

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Blockpass is building trust in Crypto and Web3 by being the one-stop-shop for the sector’s KYC/AML regulatory requirements and offering crypto-native compliance tools. - Utilizing Blockpass’ crypto-native KYC tools, customers can instantly launch regulatory compliant KYC, KYB & AML verification for DeFi, exchanges & blockchains, and Travel Rule provision for regulated VASPs. With its portable KYC/AML identity profiles, Blockpass also has a decentralized network of nearly a million crypto-enthusiasts that can join your platform easily with their verified reusable profiles in one-click.

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By Matthew Warner