A large public digital payments company required assistance across multiple areas of its business, from internal controls and audit readiness to cybersecurity and regulatory compliance.
Among its top priorities were:
- Enhancing the existing internal control framework which was deemed immature.
- Enhancing its control environment in preparation to receive future requests from internal and external auditors.
- Confirmation its exchange was reasonably secure from external hackers.
- Proper valuation of its digital assets on financial statements in compliance with required accounting standards.
- Assessing the SAB 121 disclosure requirements from the SEC for crypto assets held for customers.
- Performing a process improvement exercise regarding its mining processes.
CrossCountry Consulting’s cross-functional team of blockchain, cybersecurity, and risk teams were brought in to address these concerns and set the company up for greater operational preparedness in the future.
With deep experience across audit and controls readiness, cybersecurity, accounting advisory, and process improvement within the blockchain and digital asset industry, the CrossCountry team worked to:
- Identify gaps, develop controls, and provide recommendations across financial and security domains relevant to the exchange, allowing the company to prepare for audit and regulatory examinations.
- Validate the source code and functionality of the exchange’s mechanisms using a “whitebox” approach.
- Test each portion of the exchange that used user data for security vulnerabilities.
- Assess the digital assets the company held and revalue the assets and associated liabilities at each reporting period in accordance with accounting standards.
- Evaluate mining pool processes and provide process improvement recommendations to establish a more efficient mining process.
As a result of CrossCountry’s customized testing and validation, several misconfigurations were discovered. These misconfigurations related to the use of the wallet and the wallet remote procedure call protocol and were quickly remediated.
The company was also able to institute an efficient mining process in line with the latest digital transaction processing technology, improving numerous controls and operations.
Additionally, the company was fully prepared for current and future disclosure requirements due to CrossCountry’s drafting of new SAB 121 required disclosures, including footnote, MD&A, and Risk Factors for 10-Q.