Accounting firm BDO has announced a comprehensive cryptocurrency and blockchain auditing service – paving the way for the first Bitcoin ETF on the ASX.
Decentralised Capital founder Stephen Moss told Micky that reputable independent auditing is a necessary precondition to secure regulatory approval for the company’s proposed Bitcoin ETF.
He said the company will now put in an application for a fully audited and insured ETF in the next six months.
“This product opens the doors for us to put forward an application for a Bitcoin ETF,” he explained.
“Any reputable ETF listed on the ASX should have a reputable auditor.
“Provided you can work with regulators and the ASX to offer investors security I think Australia is possibly an ideal place to list a Bitcoin ETF.”
Decentralised Capital is a specialist blockchain firm focused on developing institutional grade digital assets and services which received backing in 2018 from Aura Group, an Asia Pacific asset management firm.
BDO crypto audits are a ‘game changer’
BDO provides services to a significant percentage of ASX listed companies and it will now provide auditing and assurances services for local cryptocurrencies, ICOs, security tokens, and exchanges.
BDO’s National Leader for Financial Services Tim Aman called it a ‘game changer’ that would attract more institutional investors to blockchain companies.
“One of the biggest barriers holding institutional investors back is the lack of transparency about the quality of digital assets,” he said.
“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.”
Decentralised Capital partners with BDO
Decentralised Capital partnered with BDO to provide the blockchain know-how for the audits.
“We’re not getting involved in the actual audit process, we’ve worked with them to set up the processes and to market this within the blockchain industry,” Moss explained.
Decentralised Capital was the first company in Australia to offer a fully insured cryptocurrency vault service for individuals, funds, and ICOs with its ‘Decentralised Custodians’ product.
The company is working on an Australian dollar stablecoin, in partnership with a local bank, as well as xbullion – a digital token redeemable for gold bullion.
xbullion, which recently received investment from Leigh Travers’ ASX listed company DigitalX, will be the first digital token audited by BDO.
Institutions need proper auditing
Moss said ‘everything’ on the company’s roadmap required the services of a respected independent auditor like BDO.
“Everything we’re doing in this space requires a reputable auditing firm,” he said.
“Institutional investors probably wouldn’t invest in a property fund that isn’t audited so why would they invest in blockchain fund that isn’t audited?”
He said that while accounting firms like KPMG or PwC will audit the financials for some blockchain companies, “BDO is the only one who will go in and audit the blockchain side of it.”
Services offered by BDO to the blockchain industry include financial statement audits, controls assurance reports, anti-money laundering, counter-terrorism, and fraud independent reviews, accounting advice, and board governance support.
Tether highlights why audits are so important
Moss said that recent controversy over Tether highlighted the need for transparency and credibility in the blockchain industry.
After claiming for years to be backed 1:1 with US dollars, the recent court case over an alleged $850 million fraud, uncovered the fact that Tether had just 74 percent fiat backing.
“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,” Moss said.
“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.”