$90B in Bitcoin Exposes Gaps in Crypto Audit Practices

In 2025, publicly traded crypto treasury companies hold close to $90 billion in bitcoin, but auditors struggle to verify those reserves amid private wallets and uneven standards.

The Core Challenge: Auditing the Unseeable 

Auditors face a stark challenge: billions locked in crypto treasuries defy the clear checks used for cash or physical assets. Traditional audits rely on visible bank statements or vault visits. By contrast, tokens may sit in self-custodial wallets with undisclosed addresses, forcing auditors to rely on custodial attestations or management claims rather than definitive proof. The Public Company Accounting Oversight Board flagged gaps where firms didn’t fully test the existence of or rights to their crypto assets. Proof-of-reserves advocates urge on-chain evidence as the baseline, yet few firms publish addresses.

This challenge is compounded by a patchwork of regional practices. While U.S. firms may tap Big Four auditors, they still often reconcile custody records subjectively. European and Japanese counterparts lean on third-party attestations but stop short of public on-chain verification. This lack of a single, global standard means verifying the existence and control of crypto assets often remains guesswork.

A Crisis of Standards and Trust

Past scandals and exchange failures have stoked calls for rigorous proof-of-reserves, yet many official audit reports still lack verifiable on-chain methods. Major accounting bodies like the Institute of Chartered Accountants advise probing questions but offer no firm directives, while PwC’s own outlook stresses the need for transparency to reduce systemic risk.

This lack of clear standards forces auditors to lean heavily on judgment, inflating the risk of missing critical issues. When major players like Strategy refuse on-chain disclosures citing security risks, or when some companies hide wallet details behind third-party attestations, stakeholders are left to wonder if the reserves truly exist, eroding trust with each vague quarterly report.

Trust Erodes as Investors Demand Transparent Proof 

Investors feel uneasy when audit confidence falters. Surveys and social media buzz reveal a growing frustration, with stakeholders demanding on-chain proof over opaque attestations. Across. Across Reddit and Twitter, the community debates the central dilemma: does publishing wallet addresses create a security risk, or does hiding them destroy all trust? When companies claim “we hold bitcoin forever” without on-chain evidence, audiences question if the reserves truly exist. Reputations suffer as market moves punish perceived opacity.

Emerging solutions aim to plug gaps. On-chain attestations using cryptographic proofs can show balances without exposing private keys. Third-party dashboards track wallet movements and flag anomalies. Some audit firms experiment with continuous monitoring tools to reconcile on-chain data in real time. Regulators in several jurisdictions debate mandatory disclosure standards or secure vault proofs. Auditor communities push for standardized guidelines that blend accounting rigor with blockchain tech. 

Building Robust Audit Frameworks and Future Safeguards

If audit gaps persist, fraud risks and confidence loss could escalate, triggering regulatory crackdowns and market volatility. Robust frameworks must emerge: accounting bodies and blockchain experts collaborating to draft clear standards. Technologies like zk-proofs can verify reserves without revealing sensitive details. Continuous on-chain verification tools should integrate with auditor workflows. Exchanges and treasury firms must adopt layered checks – public attestations, periodic third-party audits, and strong custody controls.

Positive scenarios await if industry acts. Transparent proof methods can attract institutional capital and deepen crypto markets, reinforcing blockchain as a credible settlement layer. Standardized audit practices will reduce uncertainty and boost investor confidence. Projects that embrace these safeguards can lead the next wave of credible crypto treasury models. Web3 stakeholders should push for rapid adoption of proof-of-reserves protocols and evolving standards.

Read on: Circle Freezes $58M in USDC from LIBRA Team After Court Ruling