The U.S. Securities and Exchange Commission (SEC) has settled with audit firm Prager Metis for $1.95 million regarding its audits of the defunct cryptocurrency exchange FTX. The SEC accused Prager Metis of failing to adhere to Generally Accepted Auditing Standards (GAAS), particularly in assessing the risks associated with FTX's relationship with Alameda Research, which was also controlled by FTX's founder. As part of the settlement, Prager Metis will pay a civil penalty of $745,000 and implement remedial measures, including hiring an independent consultant to review its audit processes. Gurbir Grewal of the SEC emphasized the need for auditors to maintain independence and exercise professional skepticism to protect investors. This case serves as a warning to other audit firms against neglecting compliance with legal obligations. The settlement is pending court approval.