Accounting firm FTX Armanino ends the practice of crypto auditing

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Armanino is ending its crypto audit practice and dropping clients, according to two sources familiar with the matter.

The unit could fold under pressure from Armaninos’ non-crypto clients, fearing the reputational risk to the company could challenge their audits, according to a source with knowledge of the firm’s crypto offerings. Armanino was named in a class action lawsuit last month for failing to detect irregularities at FTX.US after auditing the exchanges last year. The lawsuit was filed by Stephen Pierce, an FTX client who allegedly lost $20,000.

Armanino did not respond to requests for comment.

Armanino began offering support to the crypto industry in 2014. The company’s Crypto and Digital Assets webpage advertises a host of services, including proof-of-custody audits and stablecoin attestations, two areas that are seeing increasing demand as crypto exchanges rush to reassure customers. their stability following the disappearance of several rivals, including FTX.

Adding to the demand for crypto auditing services, venture capital firm Sequoia Capital has reportedly told fund investors that it will require even fledgling startups’ financial statements to be audited by a Big Four accounting firm, according to the Wall Street Journal.

Despite the demand, top accounting firms may be hesitant to accept clients in the crypto industry where clear accounting standards do not yet exist.

The Big Four audit firms are well positioned to leverage their expertise and credibility, but they’re bound to be more demanding in this type of environment, says Javier Paz, chief data and analytics officer at Forbes. .

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