Hong Kong-based crypto exchange Bitfinex has announced the company has engaged New-York headquartered Friedman LLP, an accounting, tax, and business consulting firm to complete a comprehensive balance sheet audit.
Friedman LLP has extensive experience working in the cryptocurrency space with the Bitfinex team stating, “we’re excited to be working with them as we take this next step toward cementing customer and shareholder confidence.”
Bitfinex is still working to find a solution to their recent fiat deposit and withdrawal issues, with money still tied up in its Taiwanese banking partners. Last month, the exchange filed suit against Wells Fargo (which has since been dropped) in a California federal court asserting the bank has prohibited its Taiwanese banking partners from completing outbound wire transfers.
The institutions mentioned in the filing are KGI Bank, First Commercial Bank, Hwatai Commercial Bank, and Taishin Bank. Wells Fargo acts as an intermediary for international bank transfers.
Bitfinex has no relationship with Wells Fargo which is why the suit was dropped. The freezing of withdrawals are however maintained by Wells Fargo through relationships with the Taiwanese banks, the freeze is noted to be due to unintelligible compliance issues at present.
Nonetheless, Bitfinex has had to deal with the negative fallout of the development, last month ensuring the public and customers that the exchange is solvent and funds exceed user deposits. Now the exchange has done a smart thing by engaging Friedman LLP for a full audit, which will be made public in the near future.
Bitfinex said that finding a reputable auditor with cryptocurrency acumen was not easy. The main issue for the audit is not the banking issues noted above, although the audit will help verify the statements of full solvency, which will be great for the industry.
Noted for the balance sheet review is the BFX token issuance which was used to recover funds when the exchange was hacked in August 2016 and succeeding news last month of full redemption of all outstanding BFX tokens. Friedman saw an opportunity to be part of the recovery story. Bitfinex noted in their update, “we were drawn to Friedman because of their adept partners who hold expertise in the constantly evolving cryptocurrency space. We are confident that Friedman is a great match to meet our accounting needs.”
The Bitfinex team finished its update saying:
“Engaging an auditor is just the first step. The comprehensive balance sheet audit, which will be dated June 30th, 2017, will require considerable time and resources on both sides. A third-party audit is important to all Bitfinex stakeholders, and we’re thrilled that Friedman will be helping us achieve this goal.”
“In connection with our engagement of Friedman and their expertise in the digital currency industry, we will be undertaking a process to optimize our financial operations and streamline internal accounting procedures as we push toward the goal of having fully audited financials (both balance sheet and operating results) in 2018. Transforming our back office and seeing that change to completion has been and will be a time-consuming and resource-intensive process. We are working diligently on this project and will release summarized results of that audit as soon as it is available.”