Riot Platforms, a well-known bitcoin mining company, has recently decided to switch accounting firms, dismissing its previous firm Marcum and welcoming Deloitte as its new partner. This surprising move has raised a few eyebrows, especially considering the delicate relationship between large accounting firms and the crypto industry.
Deloitte is now set to act as Riot Platforms’ independent registered public accounting firm for 2023, taking over the auditing of its consolidated financial statements, which Marcum had previously handled for the fiscal years between 2018 and 2022. Interestingly, the decision was not due to any disagreement over accounting principles, financial statement disclosure, or audit scope or procedure, according to a regulatory filing.
This auditor change comes at a time when some crypto companies have voiced concerns that big accounting firms are hesitant to provide auditing services to them. For instance, Mazars Group, which had previously taken on clients like Crypto.com and Binance, reportedly suspended its work with crypto companies in December.
A Binance spokesperson had stated that the so-called Big Four accounting firms (Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and KPMG) are hesitant to conduct a proof-of-reserves audit for a private crypto company. Meanwhile, accounting firm Armanino, which had conducted multiple proof-of-reserves audits for the crypto exchange Kraken in 2022, has also reportedly paused its work within the crypto industry.
On the other hand, a recent survey conducted by Bloomberg revealed that nearly half (46%) of the 24 surveyed crypto companies have their full financial audits done by one of the Big Four accounting firms. This highlights a potential divide in how these major firms view and approach the crypto industry and its companies.
The reasons behind this complex relationship between large accounting firms and crypto companies remain uncertain. Some believe that the volatility of the crypto market and the lack of clear regulations might deter the Big Four firms from taking on additional crypto clients. However, the recent move by Riot Platforms embracing Deloitte as its new auditor indicates that, despite these uncertainties, some crypto companies are still forging ahead and partnering with the big names in the accounting world.
So, while the crypto industry continues to grow and evolve, the relationship between these companies and large accounting firms remains unpredictable. It remains to be seen whether the Big Four will begin to embrace the crypto industry on a larger scale, or if they will maintain their cautious stance in relation to these burgeoning businesses. As the crypto landscape shifts, these relationships between auditors and clients will likely continue to be a topic of interest for those who follow the industry closely.
Source: Blockworks
