Understanding the Significance of SOC 2 Compliance Audits for Cryptocurrency Ventures

Introduction

While a series of global incidents severely damaged trust in the crypto space, some still hope to regain this trust by going through processes that assure compliance with certain business standards, like the proper handling of customer data.

SOC 2 Compliance Audits and Their Importance

Several firms have published press releases to announce their compliance with the service and organization controls (SOC) 2 type 2 audit, which was created to attest to the security and data-handling prowess of their firms.

Insights from Eric Lister, Director of Service Delivery at A-LIGN

To learn more about what this type of security audit means for the industry, Cointelegraph reached out to Eric Lister, the director of service delivery at audit firm A-LIGN.

In a statement, Lister highlighted some of the elements A-LIGN is looking for during this audit, what this means for the crypto space, and how this helps crypto companies to do better. According to Lister: “At a very basic level, we are looking for policies and procedures that outline routine business procedures that guide the operation of the business.”

In addition, the auditors look for documentation showing controls that ensure the procedures are operating effectively, as well as the protection of the firm’s system and its corresponding data. He said:

• “Crypto faces a challenge with news of control issues at exchanges in the past 12 months. SOC 2 audits allow crypto companies to demonstrate trust and transparency with customers, especially when it comes to safeguarding customer data and assets.”

Importance of SOC 2 Audit Results

Lister noted that the successful SOC 2 audit would show data and system security. Moreover, the executive said it would also attest to security over customer funds, which is the topmost concern of customers and government agencies.

While the audit provides assurances, Lister clarified that it does not improve business systems. “The SOC certification does not improve business systems, but it gives comfort to users and interested parties that controls are in place and operating effectively,” he explained.

Examples of Crypto Companies Passing SOC 2 Audits

Many prominent crypto companies have already passed this audit process. On July 6, crypto lending firm Nexo said that it had strengthened its data security by passing this process. According to Nexo, this event is a new milestone that enhances user security within their platform.

In 2022, crypto exchange crypto.com also announced that it passed the SOC 2 type 2 audit. Back then, the firm highlighted that passing the audit proves its commitment to meeting highly regulated standards.