The Tezos Foundation has appointed PwC Switzerland as its independent external auditor. This is the first time one of the “Big Four” has been appointed for a large-scale blockchain organization. This would also help Tezos to gain some faith among investors as it has been troubled waters for some of the other reasons
Appointment of a big 4 auditor a wise decision Tezos to build trust
The Tezos ICO was one of the blockbuster ICO’s in 2017 when it raised USD 232 million in BTC and ETH- a total that could be much more today due to a comparative surge in cryptocurrencies since then. In October Tezos Foundation started facing its own share of problems which was termed by many as “mo money, mo problems”.
There was a fallout reported between Tezos’ two young founders – Arthur and Kathleen Breitman and Johann Gevers, the president of a Swiss foundation where they blamed Gevers of “self-dealing, self-promotion and conflicts of interest” while seeking a “substantial role” in a new structure that would limit the foundation’s responsibilities which were against Swiss law that required the foundation is supposed to be independent.
Later in 2017, The Tezos project and its founders, Arthur and Kathleen Breitman, were slapped with three class-action lawsuits in the United State where the plaintiffs alleged the founders for federal securities law violations and that the fundraiser defrauded participants.
There was a lot of public spat that had then and has been tarnishing the project’s image that once was seen as promising. As for the community and investor trust is concerned Tezos has lost it all.
WIth a lot of behind now, the foundation is trying to get back to its roadmap and looks like it wants to deliver on the same. It also is trying to make efforts to get the trust back which it lost in the time post-ICO and appointing a reputed auditor is something the foundation has begun with, which at least assures the investors that the foundation is at least attempting its revival.
The “Big Four” firms, which includes PwC, are supposedly handling the vast majority of audits for public companies as well as many private companies. It is stated by many that the Big Four firms audit 99% of the companies in the FTSE 100, and 96% of the companies in the FTSE 250 Index, an index of the leading mid-cap listing companies. Their audit credibility in the market is respected and trusted among the investor community. The audit report issued by them is considered fair and unbiased. The other 3 of the Big 4, comprises of Deloitte, Ernst & Young and KPMG.
PwC believes in Blockchain, a good selection by Tezos
In March 2018, PwC was the first to declare audit services for blockchain companies claiming that its this step will reassure people to use the new and nascent technology. Their service to blockchain companies will allow companies to offer an outside review of their use of blockchain technology, thereby guaranteeing they are using it properly and enabling employees to monitor the company’s blockchain transactions.
PwC’s view on the blockchain, as mentioned on its website, is that it has the potential to powerfully disrupt many aspects of how businesses and economies work; even how societies are organized. Blockchain goes to the core of the role of trust in markets – an area that is central to PwC’s purpose.
Not just accounting services, PricewaterhouseCoopers Hong Kong, was one of the first large organization to accept bitcoin payment for its advisory services.
Audit firms, especially to the likes of PwC which clearly demonstrate an understanding of blockchain, definitely will help in building the confidence of investors towards blockchain and cryptocurrency projects like Tezos. It has been successful in gaining the trust of investors in equity markets and companies over the years providing fair and unbiased views. This is definitely a big positive for investors, blockchain companies, and the crypto community at large.
Will this move of Tezos compel other blockchain companies to appoint credible auditors? Do let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.