Cryptocurrency is a new form of money that uses cryptography to secure transactions and control the creation of new units. It’s also a way to distribute money and prevent counterfeiting.
Cryptocurrency has been around since 2009, but it’s still new and unfamiliar to most people. Many people have never even heard of it! Cryptocurrency is an alternative digital currency that can be used as a medium of exchange or as a store of value. Cryptocurrency is not issued by any central bank and exists only online.
Below we will answer the question: can cryptocurrency be audited? We will also dive into how it is audited, so you get the facts right.
So, can cryptocurrency be audited?
Yes, cryptocurrency can be audited.
The blockchain is the digital ledger that keeps track of all transactions in a cryptocurrency. It’s a “distributed database,” which means it’s spread out across thousands of computers worldwide rather than being stored on one central computer. This makes it very difficult for anyone to tamper with or change the database without being caught.
Do you really need a cryptocurrency audit?
If you’re in the cryptocurrency game, you might think that there’s no need for an audit. After all, all the transactions are recorded on the blockchain—they’re right there in black and white.
But here’s the thing: while you can see all of those transactions, they don’t necessarily mean what you think.
For example, a transaction recorded in a blockchain may still be:
- Unauthorized, fraudulent, or illegal: These transactions won’t show as unauthorized until someone takes the time to look through the blockchain and see what happened.
- Transactions between related parties: These transactions will not be flagged right away by any software that scans through transactions on blockchains because those transactions don’t seem unusual at first glance. They can only be flagged when someone decides to look into them closer.
- Linked to a side agreement that is “off-chain.”
- Incorrectly classified in the financial statements
So, you obviously need a crypto solicitor to help you audit your business transactions.
How will a crypto solicitor help in auditing?
To avoid any legal issues arising from your company’s accounts, you must have all the necessary paperwork. This includes ensuring that your records are up to date, accurate, and compliant with all relevant laws.
Here is where a crypto solicitor comes in. Cryptocurrency investigation solicitors can help you audit your business accounts to comply with all relevant laws and regulations.
A legal advisor will perform the following functions:
- Auditing: They can help you understand if your business complies with cryptocurrencies’ regulations and laws. They’ll make sure that all of your transactions are legal and ethical.
- KYC/AML: They can assist in identifying customers and preventing money laundering by using tools like Know Your Customer (KYC) and Anti-Money Laundering (AML).
- Blockchain: They will help you set up a blockchain-optimized network for security and usability, so it’s perfect for your company’s needs.
- Advice on laws and tax: It’s pretty easy to get confused about cryptocurrency’s tax laws. You have to know whether you’re liable for VAT (value-added tax) on your transactions and how to file for sales tax if necessary. A legal consultant can advise you on what insurance policies you need for yourself and your business for extra cryptocurrency security. They’ll also help you understand the tax laws that apply to cryptocurrency transactions.
So, cryptocurrency can be audited. But you’ll need to hire a crypto solicitor to do the job.
It’s simple: The legal advisor will work with your team to develop a system of checks and balances that will keep your funds safe. They’ll also audit any software you use, ensuring that it’s secure and helping you find any vulnerabilities before they’re exploited. And if anything goes wrong, they’ll be there to help you navigate the legal waters.