The latest Glassnode onchain report reveals that major labeled entities collectively hold approximately 4.23 million bitcoin, representing over 27% of the adjusted circulating supply. This significant concentration of BTC holdings underscores the prominent role these entities play within the bitcoin ecosystem. Institutional Holdings: ETFs, Miners, Government, and Exchanges Control 4.23 Million Bitcoin According to Glassnode’s […]
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US Accounting Watchdog Issues Warning on Crypto Proof-of-Reserve Audits: Investors Urged to Exercise Caution
According to a recent warning by the U.S. Public Company Accounting Oversight Board (PCAOB), crypto proof-of-reserve (POR) audits have limitations, and the board believes that investors should exercise caution when dealing with companies using POR audits.
PCAOB Calls for Investor Caution and Due Diligence When Using Proof-of-Reserve Reports
The U.S. accounting watchdog recently issued an advisory warning about auditors using proof-of-reserve (POR) techniques to audit specific crypto companies, such as exchanges and stablecoin issuers. The Public Company Accounting Oversight Board (PCAOB) stated that it is aware of certain PCAOB-registered audit firms issuing POR reports for these types of businesses. The PCAOB expressed concerns that investors “may place undue reliance on POR reports.”
The reports are not within the PCAOB’s oversight authority, and the watchdog does not consider them audits, nor does it believe that POR reports offer any meaningful assurance. The PCAOB insists that these purported audits claim to provide crypto asset verification, but they are limited, and some reports do not address the crypto entity’s liabilities. The PCAOB warning explains that some PORs may create the impression of sufficient or excess reserves in the company’s possession, but they do not provide any assurance about whether the assets were used or lent. The PCAOB statement adds:
Despite any representations to the contrary, POR Reports are not equivalent or more rigorous than an audit, and they are not conducted in accordance with PCAOB auditing standards. In addition, there is a lack of uniformity regarding service providers that perform POR engagements.
The PCAOB warning is not the only criticism of certain POR processes. In December 2022, a U.S. Securities and Exchange Commission (SEC) official advised investors to be cautious of POR reports. That same month, crypto analyst Martin Hiesboeck told Bitcoin.com News that POR is at best “incomplete” and can be “misleading and deceptive.” The U.S. accounting entity agrees and concludes its advisory warning by stating that investors should exercise significant due diligence when POR reports are used.
The PCAOB advisory notice insists, “Proof-of-reserve reports are inherently limited, and customers should exercise extreme caution when relying on them to conclude that there are sufficient assets to meet customer liabilities.”
What do you think about the use of proof-of-reserve audits in the crypto industry? Do you believe they provide enough assurance to investors or are they too limited to rely on? Share your thoughts about this subject in the comments section below.
Artificial Intelligence Crypto Assets Continue to Surge, Accounting for $4 Billion in Market Value
Following a brief downturn in mid-February 2023, artificial intelligence (AI) crypto assets have continued to see gains over the last 30 days. Currently, out of 74 listed AI-focused cryptocurrencies, the net value of all these tokens has risen to more than billion, which accounts for 0.37% of the entire crypto economy’s value.
Majority of Listed AI Cryptocurrencies See Positive Gains Over Last Month
Artificial intelligence (AI) has been a dominant theme in 2023, resulting in a significant surge in the value of AI-focused tokens this year. Bitcoin.com News reported on the rise of these cryptocurrencies at the end of January, and despite a brief pullback in mid-February, AI crypto assets have continued to see gains throughout the month.
According to data from cryptoslate.com, 74 AI-centric digital currencies are now worth .03 billion, accounting for 0.37% of the overall crypto market and 1.19% of the smart contract token market. Moreover, the majority of the 74 listed cryptocurrencies associated with artificial intelligence have experienced positive gains in the last month.
The largest of the AI-focused digital currencies is graph (GRT), with a current market valuation of approximately .42 billion. GRT has increased 70.57% against the U.S. dollar in the last 30 days. Singularitynet (AGIX), the second-largest AI-centric crypto asset, has surged 132.67% this month.
Fetch.ai (FET) has risen by 53.21%, and ocean protocol (OCEAN) is up 7.26% in the 30-day period. Iexec rlc (RLC), the fifth-largest AI-focused token, increased 6.29% against the U.S. dollar last month. The top five AI digital currencies, namely graph (GRT), singularitynet (AGIX), fetch.ai (FET), ocean protocol (OCEAN), and iexec rlc (RLC), account for .69 billion, or 67.3%, of the AI-crypto economy’s billion.
Other notable gainers in the AI digital currency market this month include alethea artificial liquid intelligence token (ALI), which increased 30.28%; phoenix global (PHB), which swelled by 23.64%; xmon (XMON), which jumped 30.47%; measurable data token (MDT), which spiked 124.97%; and singularitydao (SDAO), increased by 121.48%.
As of writing, the 74 AI-centric digital currencies have collectively risen 3.07% against the U.S. dollar in the last 24 hours. However, in the last seven days, the AI digital currency sector has experienced a 4.14% decline in value. The AI digital currency market’s trading volume in the last day was approximately 4.39 million. This figure represents 0.8% of the current .39 billion global trade volume in the last 24 hours.
What are your thoughts on the continued growth of AI-focused crypto assets? Do you believe these digital currencies will continue to see significant gains in the future? Share your opinions in the comments section below.
Report Reveals Limited Accounting Records, Commingled Funds at FTX Digital Markets in the Bahamas
PWC, one of the ‘Big Four’ auditors and among the largest professional services networks globally, recently published a report on FTX Digital Markets, the bankrupt crypto exchange’s Bahamian subsidiary. The report indicates that the entity’s accounting records have been limited, and it also noted that there is “little distinction between what represents potentially client monies and corporate funds.”
FTX Joint Provisional Liquidators Continue Investigations Into Bahamian Subsidiary
In mid-November 2022, following the Chapter 11 bankruptcy filing by the exchange FTX and its large number of subsidiaries, The Bahamas’ regulator appointed Kevin Cambridge and Peter Greaves from PWC as the joint provisional FTX liquidators in the proceedings. PWC has recently published a report that shows the crypto exchange’s Bahamian entity FTX Digital Markets reportedly commingled client funds.
FTX Digital Markets essentially held “limited accounting records,” and the PWC auditors noted that there “appears to have been little distinction between what represents potentially client monies and corporate funds.” Additionally, along with the alleged commingling of funds, data was reportedly commingled as well between the company’s wider affiliates “with little or no segregation applied.”
The auditors discovered 9.5 million in cash held at various banks, and requests have been made to the financial institutions to retrieve the funds. PWC also discussed the various properties purchased in The Bahamas by FTX executives, and it further noted that FTX Digital also owns about million in ancillary assets. In addition to the assets discovered, a significant portion of the crypto assets is not under the joint provisional FTX liquidators’ control due to the 3 million hack stemming from FTX International.
“The [joint provisional liquidators] have requested the transfer of .7 million in [tether] from an account in the name of FTX Digital, and they are waiting for the transfer of these assets to their custody,” the report from the PWC auditors further discloses. The report also calls for further investigations into the company’s “cash management,” “antecedent transactions,” and “customer migration.” FTX’s joint provisional liquidators say they continue to employ about 16 individuals for ongoing investigations and research into the “possibility of restructuring the business.”
What do you think about the recent report from PWC concerning the FTX Bahamian subsidiary? Let us know what you think about this subject in the comments section below.
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Solving for Bitcoins Accounting and Reconciliation Needs
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Daily Liquidity Comes to Crypto Fund With Lukka Accounting Tool
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Ripple Escrow Reporting Creative Accounting or Much Ado About Nothing
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