BDO has partnered with specialist blockchain firm Decentralised Capital to bring auditing and assurance services to blockchain and cryptoassets, a move it hopes will entice more institutional investors.
Under the partnership, BDO will provide comprehensive audit and assurance services for blockchain companies and assets such as cryptocurrencies, security tokens, stablecoins, trading platforms and Initial Coin Offerings.
According to Decentralised Capital, which has offices in Singapore and Sydney, it is the first time a digital asset firm in Australia has partnered with an accounting and auditing firm.
“One of the biggest barriers holding institutional investors back is the lack of transparency about the quality of digital assets,” said BDO financial services national leader Tim Aman.
“By providing comprehensive audit and assurance services, our entry into this growing sector will be a game changer for new investment into this asset class.”
Mr Aman said assurance services provided will include financial statement audits, controls assurance reports, anti-money laundering counter terrorism and fraud independent reviews, accounting advice and board governance support.
Decentralised Capital founder Stephen Moss said the partnership with BDO was a crucial step towards creating credibility for the blockchain industry, particularly considering recent criticism over stablecoin Tether.
Tether was recently asked by the New York Attorney General’s office to provide evidence that its stablecoins were 100 percent backed by USD. Tether’s lawyer then disclosed in an affidavit that it was only 74 percent backed by fiat equivalents.
“Investors have historically found it difficult to distinguish whether projects are reputable and adequately asset-backed given the lack of services in audit and assurance from reputable firms,” said Mr Moss.
“Projects seeking to mislead investors have historically relied upon the fact that reputable audits are not offered in the blockchain industry, and we’re about to remove that excuse and bring some real credibility to the sector.”
The first project to be audited by BDO will be gold-backed token xbullion, which recently received investment from ASX-listed blockchain company DigitalX.
“This is an essential requirement for the blockchain industry to evolve into securities and open the doors for institutional involvement,” said Mr Moss.