Grant Thornton LLP in the US has announced that it audited more than $10bn in cryptoassets during the first three months of 2019, covering 40 different cryptocurrencies across more than 100 million addresses.
Cryptocurrency companies face a growing imperative from investors and regulators to verify the existence and value of their stated assets. “Cryptocurrency companies must contend with an auditing challenge that is at once simple and complex,” says Johnny Lee, national practice leader for Forensic Technology Services at Grant Thornton. “First, can you prove that you own and control the assets you are claiming as yours? And, second, do those assets really exist – and can you prove as much?”
These questions can be hard to answer since the audit trail for shared ledgers is not intuitive; shared-ledger coins are designed to consummate transactions, not necessarily to lighten the load for an auditor. Establishing a point-in-time balance for a given cryptoasset can be a tremendously intricate endeavour requiring an auditor to parse and index transaction histories in a sophisticated manner.
Grant Thornton audit practice partner and leader of the firm’s digital practice, Markus Veith said: “We’ve spent four years developing technology platforms and auditing methodologies that allow us to create point-in-time balances for cryptocurrencies – and we’ve done it with a level of accuracy that satisfies strict auditing standards. The result is that we can independently verify what a company holds in various cryptocurrencies.”
Grant Thornton’s proprietary hybrid-cloud audit platform houses complete archival copies of blockchains for 40 cryptocurrencies. The firm has also developed proprietary methods for testing the ownership and existence of each of these currencies and proprietary forensic nodes for certain complex currencies like Ethereum, Ethereum tokens, Bitcoin and Bitcoin Cash.