3 ms·

As stated in the document, the audit firm is required by law "to obtain evidence about Management Assertion". Is not just a rubber stamp. So far you have not

by 323 4y ago

As stated in the document, the audit firm is required by law "to obtain evidence about Management Assertion". Is not just a rubber stamp. So far you have not provided any evidence about Gemini lying, just whataboutism about Tether.

ceejayoz 4y ago
The evidence for an attestation is getting a look at bank balances. An audit would determine where the money came from, who has claims on it, etc. > So far you have not provided any evidence about Gemini lying, just whataboutism about Tether. Calling an attestation an audit is a lie. Tether provides a concrete example of why attestations are not sufficient; an audit would've revealed the shenanigans with transfers in and out, and that's likely why they never completed one despite promising regular audits on their home page for years.
- 323 4y ago
  As stated in the report, the "Management Assertion" was examined and "found to be fairly stated in all material respects". The "Management Assertion" is described in Section II, containing among other things "segregated specifically for the US dollars that correspond to Gemini dollars". So to my reading the BPM accounting firm, which is in top 5 Bay Area accounting firms, agrees that the Gemini dollars are backed by segregated dollars. You should well known what segregated means.
  - ceejayoz 4y ago
    "We have $1B in the bank account at 9am on 6/13/2022" is a management assertion. It can be correct. It can be entirely true, and verifiable! An accounting firm will happily attest to its truthfulness. An audit might reveal that the $1B is someone else's money.
    - 323 4y ago
      Which is why the word SEGREGATED is important. Segregated means that the company can not touch that money except to return it to clients. That's law. So it can't be "someone else's money" by law. And the bank holding this segregated money is also complied by law. https://financialit.net/blog/segregated-accounts/why-fintech-companies-are-requested-have-segregated-bank-accounts https://financialit.net/blog/segregated-accounts/why-fintech...
      - ceejayoz 4y ago
        Segregated means they've separated customer funds and company funds. Nothing prevents them from taking $1B from a friendly (or closer, as in the Tether/Bitfinex scenario) exchange as a "customer" for a day to pad out the balance. Again, stablecoins have literally been caught doing exactly this.
        323 4y ago
        Your logic applies to all US retail exchanges then, because they are no more audited than Gemini is here. No one traces every single dollar going into/outof the ETrade/Charles Schwab/... segregated accounts. So according to your logic they are all frauds. I know, I know, whatabout Tether.
        ceejayoz 4y ago
        > Your logic applies to all US retail exchanges then... Which is why SIPC exists. https://en.wikipedia.org/wiki/Securities_Investor_Protection_Corporation https://en.wikipedia.org/wiki/Securities_Investor_Protection... (I guarantee you Schwab undergoes full audits, not just attestations. Here's one: https://www.sec.gov/Archives/edgar/data/87634/000008763417000004/Public.pdf https://www.sec.gov/Archives/edgar/data/87634/00000876341700...)
- michaelt 4y ago
  Every audit is partly built on attestation, though. If my company has $100 in the bank and owes $50 to our gardener based on a handshake agreement, how is an auditor supposed to find out about the debt except by asking me? Just because it hasn't been entered into the accounts, doesn't mean we don't have a legal obligation to pay the guy. Shady dealings in this area can e.g. get you banned from being a company director in the future - but that's hardly a deterrent in the cryptocurrency space, where a fraud can leave you set for life.
  - ceejayoz 4y ago
    > Every audit is partly built on attestation, though. Sure. A house is built on a foundation, but a foundation is not a house. > If my company has $100 in the bank and owes $50 to our gardener based on a handshake agreement, how is an auditor supposed to find out about the debt except by asking me? In the Tether case, by going "Hey, why'd you get hundreds of millions of dollars yesterday? Who's it from?" It stood out to the NY AG, it'd have stood out to an auditor.

by 323 4y ago

ceejayoz 4y ago

The evidence for an attestation is getting a look at bank balances. An audit would determine where the money came from, who has claims on it, etc. > So far you have not provided any evidence about Gemini lying, just whataboutism about Tether. Calling an attestation an audit is a lie. Tether provides a concrete example of why attestations are not sufficient; an audit would've revealed the shenanigans with transfers in and out, and that's likely why they never completed one despite promising regular audits on their home page for years.

323 4y ago
As stated in the report, the "Management Assertion" was examined and "found to be fairly stated in all material respects". The "Management Assertion" is described in Section II, containing among other things "segregated specifically for the US dollars that correspond to Gemini dollars". So to my reading the BPM accounting firm, which is in top 5 Bay Area accounting firms, agrees that the Gemini dollars are backed by segregated dollars. You should well known what segregated means.
- ceejayoz 4y ago
  "We have $1B in the bank account at 9am on 6/13/2022" is a management assertion. It can be correct. It can be entirely true, and verifiable! An accounting firm will happily attest to its truthfulness. An audit might reveal that the $1B is someone else's money.
  - 323 4y ago
    Which is why the word SEGREGATED is important. Segregated means that the company can not touch that money except to return it to clients. That's law. So it can't be "someone else's money" by law. And the bank holding this segregated money is also complied by law. https://financialit.net/blog/segregated-accounts/why-fintech-companies-are-requested-have-segregated-bank-accounts https://financialit.net/blog/segregated-accounts/why-fintech...
    - ceejayoz 4y ago
      Segregated means they've separated customer funds and company funds. Nothing prevents them from taking $1B from a friendly (or closer, as in the Tether/Bitfinex scenario) exchange as a "customer" for a day to pad out the balance. Again, stablecoins have literally been caught doing exactly this.
      - 323 4y ago
        Your logic applies to all US retail exchanges then, because they are no more audited than Gemini is here. No one traces every single dollar going into/outof the ETrade/Charles Schwab/... segregated accounts. So according to your logic they are all frauds. I know, I know, whatabout Tether.
        ceejayoz 4y ago
        > Your logic applies to all US retail exchanges then... Which is why SIPC exists. https://en.wikipedia.org/wiki/Securities_Investor_Protection_Corporation https://en.wikipedia.org/wiki/Securities_Investor_Protection... (I guarantee you Schwab undergoes full audits, not just attestations. Here's one: https://www.sec.gov/Archives/edgar/data/87634/000008763417000004/Public.pdf https://www.sec.gov/Archives/edgar/data/87634/00000876341700...)
michaelt 4y ago
Every audit is partly built on attestation, though. If my company has $100 in the bank and owes $50 to our gardener based on a handshake agreement, how is an auditor supposed to find out about the debt except by asking me? Just because it hasn't been entered into the accounts, doesn't mean we don't have a legal obligation to pay the guy. Shady dealings in this area can e.g. get you banned from being a company director in the future - but that's hardly a deterrent in the cryptocurrency space, where a fraud can leave you set for life.
- ceejayoz 4y ago
  > Every audit is partly built on attestation, though. Sure. A house is built on a foundation, but a foundation is not a house. > If my company has $100 in the bank and owes $50 to our gardener based on a handshake agreement, how is an auditor supposed to find out about the debt except by asking me? In the Tether case, by going "Hey, why'd you get hundreds of millions of dollars yesterday? Who's it from?" It stood out to the NY AG, it'd have stood out to an auditor.