Cryptocurrency companies have been publishing audits, or so-called proof-of-reserve reports, to gain investor confidence on the heels of the FTX collapse.

But the U.S. Securities and Exchange Commission (SEC) says investors should take those reports with a grain of salt.

“Investors should not place too much confidence in the mere fact a company says it’s got a proof-of-reserves from an audit firm," Paul Munter, the acting chief accountant for the SEC, told the Wall Street Journal.

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Once FTX (CRYPTO: FTT) went bankrupt, cryptocurrency exchanges worldwide declared that they would issue transparency reports to calm worried investors.

These cryptographic data structures, called Merkle tree proof-of-reserves, allow customers to verify the stability of their holdings on exchanges while still maintaining privacy.

Munter says audit companies and investors alike should report troublesome "fact patterns" to the SEC if they are discovered.

Binance (CRYPTO: BNB), the biggest cryptocurrency exchange by trading volume, recently released a report on its proof-of-reserves but later withdrew it after the auditing firm it hired, Mazars, announced it would no longer be working with crypto companies.

Once Mazars quit, Binance set out to hire another audit company. So far, the 'big four' auditing firms — Deloitte, EY, KPMG and PwC — has been "unwilling" to conduct proof of reserves for the company, Binance claims.

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