Prescreening Questions to Ask Cryptocurrency Auditor

What experience do you have in auditing cryptocurrency transactions and systems?

This is essentially your starting point. Anyone can claim to audit cryptocurrencies, but you want specifics. Have they handled sizable transactions? Worked with well-known firms? Numbers and names matter. Real-world experience speaks louder than generic claims of competence.

Can you explain how you stay updated with the latest developments in blockchain technology?

Blockchain technology evolves faster than a teenager's social media trends. You need someone who's continually updated. Do they read research papers? Participate in forums? Attend conferences? You need assurance that they’re not stuck in 2017.

What blockchain platforms are you most familiar with and have audited before?

Are they Ethereum-centric, or do they dabble in various platforms like Binance Smart Chain, Solana, or Cardano? The blockchain ecosystem is vast. Their experience should align with the platforms relevant to your needs.

How do you approach the auditing of smart contracts?

Smart contracts are tricky. They need to be glitch-free because once they're on the blockchain, they're immutable. Ask for their approach: Do they manually review the code? Use automated tools? A mix of both?

What tools and software do you use for cryptocurrency auditing?

The right tools make the job smoother. Are they using tools like Truffle, MythX, or Etherscan? Knowing their toolkit can give you insights into their reliability and efficiency.

How do you verify the integrity and security of a blockchain network?

Blockchain security isn't just about encryptions and decentralization. It extends to network protocols and consensus mechanisms. You want to hear technical measures—penetration tests, security audits, and checks are the bare minimum.

Can you describe a challenging audit you have conducted and how you resolved issues?

This question is gold. It weeds out the talkers from the doers. A real pro will walk you through the details and the resolution process—what was the issue? How did they diagnose and solve it?

What standards or frameworks do you follow when conducting cryptocurrency audits?

Standards like ISO and frameworks such as NIST or OWASP are crucial. They ensure consistency and reliability. If they don’t follow any known standards, that’s a red flag. Customize, yes, but follow, absolutely.

How do you handle discrepancies or anomalies found during an audit?

Their approach to problem-solving is crucial. Do they escalate issues? Initiate deeper forensic investigations? You want to understand their escalation procedures and transparency in handling unexpected situations.

What steps do you take to ensure compliance with regulatory requirements?

Cryptocurrency regulations change often. They must be conversant with AML, KYC, and other relevant regulations. If they’ve worked internationally, even better—they’ll likely be more versatile in handling various legal landscapes.

Do you have experience with both centralized and decentralized exchanges?

Auditing a centralized exchange is not the same as auditing a decentralized one. Experience in both areas provides a balanced skill set. Can't hurt to know if they've worked with the likes of Binance and Uniswap alike.

How do you assess the security of private keys and wallets?

Private keys and wallets are your gateway to your funds. Ask for their process—cold storage, multi-signature wallets, hardware wallets. They should be well-versed in securing these critical elements.

Can you explain your process for auditing tokenomics and the distribution of tokens?

Tokenomics can make or break a project. They should review the distribution model, vesting period, and utility of tokens meticulously. Ask for details on how they analyze these crucial aspects.

How do you ensure transparency and accuracy in your audit reports?

Accuracy is non-negotiable. Transparency in reporting builds trust. Are their reports user-friendly? Do they provide comprehensive details along with an executive summary for non-tech folks? You need a clear answer.

What are the common risks you look for in cryptocurrency projects?

Risks could include anything from coding vulnerabilities to regulatory non-compliance. Understanding the common pitfalls they look for will give you insights into their thoroughness and breadth of knowledge.

How do you communicate your findings and recommendations to non-technical stakeholders?

Technical jargon can be intimidating. They should be able to distill complex findings into understandable language for stakeholders who aren’t tech-savvy. Clear communication is a crucial skill.

What measures do you take to protect sensitive information during an audit?

Sensitive information is a treasure trove for bad actors. Ask about their data protection measures, encryption methods, and confidentiality agreements. They should have robust protocols in place to safeguard information.

Can you provide examples of audits you have performed for ICOs or DeFi projects?

ICOs and DeFi projects are quite the rage but come with their own set of challenges. If they’ve successfully audited such projects, ask for case studies or references. This can give you a sense of their expertise and credibility.

How do you evaluate the effectiveness of governance models in crypto projects?

Governance models dictate how decisions are made within a project. An effective governance model ensures transparency and fairness. Ask how they evaluate these models and their impact on the project's success.

How do you manage potential conflicts of interest during an audit?

Conflicts of interest can muddy the waters. They should have clear guidelines and policies to manage these situations. Their approach to maintaining impartiality is crucial for an unbiased audit report.