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If "cash and cash equivalents" is wrong, that's fraud, not something I should have taken with a grain of salt.
by maxerickson 5y ago
If "cash and cash equivalents" is wrong, that's fraud, not something I should have taken with a grain of salt.
- formerkrogemp 5y agoCash and cash equivalents can be very wrong, even when audited by firms such as Ernst and Young, one of the big four accounting firms. Wirecard is a good example. https://www.ft.com/content/bcadbdcb-5cd7-487e-afdd-1e926831e9b7 https://www.ft.com/content/bcadbdcb-5cd7-487e-afdd-1e926831e... Grant Thornton audits Coinbase last I checked. Hopefully they do a better job than EY. I doubt a "stablecoin" holding would count as cash equivalents, but not all cash equivalents are equal and the definition has changed over the years. Commercial paper, 1-3 month maturing Treasury notes, certificates of deposit, money market accounts, and savings account funds can all be counted as cash equivalents. For example, if you hold a two month commercial paper of another cryptocurrency company as Coinbase, this might qualify as a cash equivalent. Cash equivalents are not all equally liquid or risky. Even if all of the cash and cash equivalents are there and solvent, the definition of a cryptocurrency in a bankruptcy might not be settled in a court of law in such a way that it favors account holders of Coinbase held cryptocurrency over stockholders or bondholders.
- maxerickson 5y agoAll had been set up by Wirecard executives to dupe the auditors and help disguise what Munich prosecutors now call “a fraud in the billions”. Yeah, that's what I said, fraud. Do you have an example where it was wrong without fraud?