The international auditing firm that attests to Coinbase’s USDC stablecoin announced it has audited more than $10 billion worth of client assets in the first quarter of 2019, according to a statement.
The accounting firm Grant Thornton serves between 15 and 20 clients that are highly leveraged in crypto assets, including prominent crypto-denominated exchanges. The audits establish that a client’s holdings or investments exist and are fairly stated in the quantities claimed.
While discrepancies have been found between the blockchains and balance sheets, the firm was not at liberty to disclose such cases.
“We are constantly finding more coins than we’ve been told are out there,” said Johnny Lee, national practice leader for Forensic Technology Services, focusing in on “privacy coins that don’t really have an audit trail.”
The firm uses a variety of methodologies designed for the architecture of each disparate blockchain. Sometimes it spins up reconstructed blockchains, a hybrid cloud, and “forensic nodes” – at a great, though unstated, expense – to reconcile a claimed asset with its supposed time-stamp, or equivalent metric of proof.
He also said each blockchain has its own quirks, or unexpected issues, mentioning that the private, permissioned Ripple “is quite a monster to set up.”
Grant Thornton does not perform 100 percent audits of a client’s portfolio – a process that is prohibitive by price and time – though the sample selections the firm tests sometimes run back to a blockchain’s genesis block.
To some extent, the firm learns as it goes. Starting out four years ago with one institutional client that only held bitcoin, Veith said the company took a “measured risk” to innovate and take on more digital assets. He also said since the market bottomed out in 2018, the firm’s clients have diversified their portfolios. It also became the firm of record for Coinbase’s USDC.
Code analysis graphic via Shutterstock