Senators Warren and Wyden Take Action
In a bold move, Senators Elizabeth Warren and Ron Wyden have called on the Public Company Accounting Oversight Board (PCAOB) to rein in the audits of cryptocurrency companies. This comes on the heels of the collapse of three major banks—Silvergate, Silicon Valley, and Signature Bank. The senators fear that ‘shady audits’ were at least partially to blame for these financial failures.
A Call for Accountability
On March 21, the duo sent a letter to PCAOB Chair Erica Williams urging her to respond to inquiries about whether inadequate audits and flawed proof-of-reserve reports contributed to the banks’ downfalls. The letter emphasized the need for high-quality audits that adhere to established standards. Warren and Wyden firmly believe that the PCAOB has the authority to enforce this.
Highlighting the Risks
Warren pointedly argued that banks can’t be trusted to regulate themselves, stating, “Congress and our regulators need to step up.” The senators expressed particular concern about how the recent failings of crypto exchange FTX might have influenced the banks, given that it received questionable financial reviews from PCAOB-registered auditors.
Setting a Deadline
The senators have not cut any corners, urging Williams to provide a staff-level briefing by March 31 and to answer their burning questions by April 4. This is a tight timeline, indicating the urgency of their concerns regarding the relationship between crypto firms and the integrity of banking systems.
Regulatory Oversight in Question
Warren has been consistent in her criticism of the digital asset space, linking a lack of regulatory oversight to the banks’ failures. Just days prior to calling out PCAOB, she requested Federal Reserve Chair Jerome Powell to recuse himself from reviewing the regulatory gaps that facilitated the collapse of Silicon Valley Bank. How many more warnings do we need before someone takes action?
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