SEC Increases Scrutiny of Crypto Audits, Tron Founder Had $580M Bitcoin Stash
• Former FTX CEO Sam Bankman-Fried has been released on bail after appearing in U.S. federal court in New York.
• The U.S. Securities and Exchange Commission (SEC) is increasing its scrutiny of audits of cryptocurrency companies to warn investors.
• Tron founder Justin Sun was a top client of crypto asset manager Valkyrie Investments and had more than $580 million of bitcoin stashed with the asset manager.
On Thursday, Sam Bankman-Fried, the CEO and founder of the crypto exchange FTX, appeared in U.S. federal court in New York facing charges. After his appearance, Bankman-Fried was released on bail and will be living with his parents in Palo Alto, California. The bail was secured in part by their house and came with a long list of requirements for Bankman-Fried to remain free. He is not allowed to make financial transactions of more than $1,000, can’t open new lines of credit and must go through substance abuse and mental health treatment.
The U.S. Securities and Exchange Commission (SEC) is also increasing its scrutiny of audits of cryptocurrency companies. The SEC’s acting chief accountant, Paul Munter, warned investors not to rely too heavily on proof-of-reserve reports as they are not enough information to assess whether the company has sufficient assets to cover its liabilities.
In addition, CoinDesk has reviewed a private financial document that shows Tron founder Justin Sun was a top client of crypto asset manager Valkyrie Investments. Sun had more than $580 million of bitcoin stashed with the asset manager at one point in August, which amounted to over 90% of money at Valkyrie’s largest division, Valkyrie Digital Assets LLC. This further demonstrates the importance of audits of cryptocurrency companies and the need for investors to be aware of the risks involved.