The US SEC initiated its legal action against former FTX auditor Prager Metis.
FTX was a famous Crypto exchange and crypto trading volume was highest on this exchange, after the Binance exchange, but in November of last year collapsed badly following a Coindesk media report on FTX’s financial position. Allegedly the FTX executives misused customers funds for personal benefits.
On 29 Sep 2023, The United States Securities and Exchange Commission (SEC) announced legal action against international accounting firm Prager Metis.
Prager Metis was an auditing service provider for the FTX crypto exchange before the bankruptcy of the exchange.
The SEC agency alleged that Prager Metis was not providing services with full independence. According to the SEC agency, an auditor firm must keep accounting and audit tasks separate.
As per SEC charges, this auditing firm violated several rules several times over the past 3 years while providing services to the FTX exchange.
The Filing also noted that FTX’s former CEO Sam Bankman-Fried (SBF) publicly announced the audit reports to gain public trust but it was the auditor’s duty to ensure the fund’s safety & make sure that FTX would use its work to bolster the public trust.
On 25 January of this year, the current FTX exchange CEO John Ray III also dragged attention toward the audit reports and said that he was not satisfied with the audited financial reports.
At the time, Senators Elizabeth Warren and Ron Wyden raised their voices against this auditing firm and said that the firm failed to provide services with transparency, instead engaged in advocacy of the crypto industry.
Currently, FTX’s former CEO SBF is in jail & the court trials will start this month against SBF to confirm the fraud charges in which SBF was involved.
Read also: Black Swan author criticizes Bitcoin proponent Robert Kiyosaki