What SOC 2 compliance audits mean for crypto projects

In the aftermath of several global incidents that severely damaged trust in the cryptocurrency space, some crypto projects are striving to regain credibility by undergoing processes that ensure compliance with specific business standards, particularly in terms of handling customer data securely. To this end, numerous firms have issued press releases proclaiming their successful completion of the Service and Organization Controls (SOC) 2 type 2 audit, which validates the security measures and data-handling capabilities of their organizations.

To shed light on the significance of this type of security audit for the crypto industry, various crypto blogging platforms sought insights from Eric Lister, the director of service delivery at the audit firm A-LIGN. Lister elaborated on what his firm looks for during the audit, the implications for the crypto space, and how it benefits crypto companies.

Lister emphasized that, at a fundamental level, the auditors seek policies and procedures that outline the routine business operations guiding the company. Additionally, they examine documentation demonstrating the effectiveness of controls in place to ensure the smooth functioning of these procedures, as well as the protection of the organization’s system and associated data. Lister noted that SOC 2 audits enable crypto companies to establish trust and transparency with customers, particularly in safeguarding customer data and assets, given the challenge faced by the crypto sector following news of control issues at exchanges over the past year.

The successful completion of a SOC 2 audit demonstrates the security of data and systems, reassuring customers and government agencies regarding the protection of customer funds, which is a top concern. However, Lister clarified that while the audit provides assurances, it does not improve business systems. Instead, it offers comfort to users and stakeholders by confirming that the necessary controls are in place and operating effectively.

Several prominent crypto companies have already passed this audit process, showcasing their commitment to robust security practices. For instance, on July 6, crypto lending firm Nexo announced the strengthening of its data security through the successful completion of the SOC 2 audit, underscoring the company’s dedication to enhancing user security within its platform. Similarly, in 2022, crypto exchange crypto.com disclosed its passing of the SOC 2 Type 2 audit, highlighting its adherence to highly regulated standards.

By subjecting themselves to SOC 2 compliance audits, crypto projects aim to rebuild trust in the industry and assure customers that their data and assets are protected. While these audits do not directly improve business systems, they play a crucial role in instilling confidence among users and stakeholders, demonstrating that controls are in place to ensure the security and integrity of operations. With more crypto companies embracing SOC 2 compliance, the industry is moving towards establishing stronger safeguards and reinforcing its commitment to meeting rigorous standards.