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PwC, KPMG, Others to Play Critical Role in Crypto Audit

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  • PwC, KPMG, Others to Play Critical Role in Crypto Audit

The surge in global adoption of cryptocurrencies saw the Big Four auditing companies getting ready to tap into the possibility of what could be with rising global acceptance of cryptocurrencies.

The big four companies are PricewaterhouseCoopers, KPMG, Ernest & Young and Deloitte.

This is coming after Goldman Sachs rubbished Bitcoin and other cryptocurrencies, saying they are not assets of value and should not be regarded as investment vehicles.

However, with cryptocurrency market capitalisation presently at over $260 billion, top global auditing firms are looking to tap into a new unproven market with huge potentials.

According to recent reports, the companies and other Fortune 500 companies have been working with a number of cryptocurrency-focused companies to devise means to combat regulatory bottleneck, interoperability challenges, consensus models and development of the technology.

In a recent interview, Henri Arslanian, a global crypto leader at PwC,  said the Big Four firms have a very important role to play in the advancement of the cryptocurrency ecosystem.

“Although Bitcoin was designed with a trustless ideology, the reality is that the industry still requires trusted entities to catalyze the development of the ecosystem,” he said.

Two years ago, PwC company (Hong Kong branch) started accepting Bitcoin payments from clients and eventually set up a crypto team after an increase in revenue generation and inflow of a new type of young clients. So far, PwC has set up crypto teams in 20 countries of operation since the first adoption.

In the last 18 months, the team has conducted over 350 engagements within the cryptocurrency sector.

According to Arslanian, PwC’s crypto teams are not only focused on tax and accounting challenges, but audit and assurance services are also in demand.

“Over the last couple of months, we’ve expanded our work. We recently closed the first ever crypto fundraising deal at PwC, in which we led a $14 million series A round for a Swiss-based crypto firm with Asian family offices. We are also the auditor for BC Group, a publicly listed crypto company in Hong Kong.”

Similarly, an experts with KPMG, Erich Braun, said that an organization’s blockchain system should be developed with the intent to meet both operational and accounting needs to comply with accounting standards and other regulatory requirements.

“SEC issuers will want to design blockchain technologies to support the entity’s internal control over financial reporting. Being able to demonstrate how these technologies achieve their objectives in a well-controlled environment is critical to a successful blockchain strategy. If the technology is not auditable, the immense benefits it brings, such as increasing efficiencies and cutting costs, may not be realized,”  Braun Stated.

Also, driving change in the industry is Ernst & Young. Paul Brody, one of blockchain leaders at Ernest & Young told Cointelegraph in an interview that the firm has been working with Microsoft and ConsenSys to develop an open-source blockchain project called Baseline Protocol, which runs on the public Ethereum mainnet.

Deloitte and the World Economic Forum also released a report on blockchain interoperability. While Accenture and the Digital Dollar Foundation released a Digital Dollar white paper on May 27, which provides key findings on a U.S. central bank digital currency.

Cryptocurrency

Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue

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Bitcoin

Bitcoin Rises to $11,050 Per Coin on Friday

Bitcoin rose above $11,000 per coin on Saturday after weeks of trading in a range, between $10,867 and $10,960 despite liquidity drying up across exchanges.

The cryptocurrency most dominant coin gained 1.67 percent to settle at $11,050 per coin as at 8.04 pm Nigerian time on Saturday.

“Markets are looking weak on drying-up liquidity on exchanges while BTC hardly managed to reach back above the $11,000 level and couldn’t sustain it,” said Jean Baptiste Pavageau, partner at trading firm ExoAlpha.

Indeed, major USD/BTC exchange volumes are looking feeble, with Friday tallying a $211 million total so far while daily averages the past month have been $364 million.

Rupert Douglas, head of institutional sales at crypto brokerage Koine, said he is concerned that stock markets are about to start correction that could potentially hurt crypto as investors look to unload risky assets.

“I think equities are headed lower and if that happens digital assets will get sucked down, too,” Douglas told CoinDesk. “The tech shares are too frothy,” he added

Another factor crypto investors are tracking: Bitcoin dominance, a measure of its market capitalization as a percentage of total cryptocurrencies. September has seen bitcoin hit 2020 dominance lows, hovering around 60% Friday.

So far, bitcoin dominance has largely been sliding downwards since the beginning of 2020,” said Andrew Tu, an executive at crypto quant trading firm Efficient Frontier. “It will be interesting to see if we see a short-term reversion of the bitcoin dominance back upwards.

Pavageau of ExoAlpha explained that Decentralized Finance (DeFi) is captivating the crypto market, and that is causing decline in bitcoin.

The market is focused on DeFi. It seems that locking value is also draining liquidity from exchanges as traders are noticing higher slippage when executing in the market,” Pavageau said. “A question to ask might be: Is the total value locked a threat to market liquidity for active traders?

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Nigeria’s Securities and Exchange Commission Moves to Regulate Cryptocurrencies

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SEC Says Cryptocurrencies Are Assets Under its regulatory Jurisdiction

Nigeria’s Securities and Exchange Commission (SEC) said it will start regulating unregulated digital assets like Bitcoin and other cryptocurrencies.

The Commission made the statement on Monday in a publication released on its website.

It said the objective is not to hinder technology or stifle innovation but to create standards that encourage ethical practices and protect both investors and businesses offering digital assets as an investment vehicle.

The statement reads, “Since digital assets offerings provide alternative investment opportunities for the investing public, it is essential to ensure that these offerings operate in a manner that is consistent with investor protection, the interest of the public, market integrity and transparency.”

SEC said it has been conferred powers by section 13 of the Investment and Securities Act, 2007 to regulate investments and securities business in Nigeria.

It, therefore, stated that in line with these provisions, it has adopted a three-pronged objective to regulate market innovation, foster investment safety, deepen market provisions and provide solutions to investment problems.

It said, “Section 13 of the Investment and Securities Act, 2007 conferred powers on the commission as the apex regulator of the Nigerian capital market to regulate investments and securities business in Nigeria.

“In line with these powers, the SEC has adopted a three-pronged objective to regulate innovation, hinged on safety, market deepening and providing solution to problems. This will guide its strategy, its regulations and its interaction with innovators seeking legitimacy and relevance.

“Consequently, the SEC will regulate crypto-token or crypto-coin investments when the character of the investments qualifies as securities transactions.”

Accordingly, the commission explained that virtual assets are securities unless proven otherwise.

It said, “Issuers or sponsors are expected to satisfy the burden of proving that the virtual assets do not constitute securities by making an initial assessment filing.

“However, where the finding of the commission is that the virtual assets are indeed securities (not structured to be exclusively offered through crowdfunding portals or other exempt methods), then the issuer or sponsor must register the digital assets.

“The registration process for virtual assets will therefore involve a two-prong approach – an initial assessment filing to satisfy the burden of proof and a filing for registration proper, either made directly by the issuer or sponsor or where the burden of proof is not satisfied.

“Similarly, all digital assets token offering, initial coin offerings, security token ICOs and other Blockchain-based offers of digital assets within Nigeria or by Nigerian issuers or sponsors or foreign issuers targeting Nigerian investors, shall be subject to the regulation of the commission.”

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Paxful Expands Beyond Bitcoin, Adds Tether (USDT) to its Platform

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tether

Global peer-to-peer bitcoin marketplace, Paxful, announced today the addition of Tether (USDT) to its platform. USDT belongs to a class of cryptocurrencies known as stablecoins.

A stablecoin is a type of cryptocurrency whose value reflects an existing fiat currency (e.g. US Dollars). The inclusion of USDT, the world’s largest stablecoin by market value, will assist users in combating a volatile market, protecting their assets, and expanding their portfolio.

The industry has seen a surging demand for a stable digital currency amidst fears of an economic recession in both traditional and digital markets. In the last 12 months, Tether has established itself as a champion amongst stablecoins, with a market capitalization of over $13 billion (https://bit.ly/3kdjoHk).

“We consider this a big step for us since this is the first cryptocurrency other than bitcoin we have on the platform,” said Ray Youssef, CEO, and co-founder of Paxful. “We always listen to our customers. We understand that some come to Paxful for wealth generation and turn to crypto for stability when their national currency is affected by inflation. We hope that this can aid them to be more in control of their finances.”

The addition comes with a hedging option, allowing users to instantly convert BTC to USDT and vice versa, helping the users protect their funds during bitcoin price fluctuations.

The company also plans to enable USDT trading on the platform. Same as with the bitcoin (BTC) trading in the Paxful marketplace, users can buy and sell USDT with over 300 payment methods. The USDT balance is accessible via the wallet page, where the current market price for both coins is displayed. The launch of this feature marks Paxful’s first step towards potentially adding new cryptocurrencies in the future.

The company recently announced that the platform Paxful has hit 4.5 million registered wallets, reached 4.6 billion USD in trading volume, and reduced dispute levels to under 1%. Since inception, they have added 1 million users per year and so far in 2020 and are on track to sign up an additional 2 million users by the end of the year.

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