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As stated in the report, the "Management Assertion" was examined and "found to be fairly stated in all material respects". The "Management Assertion" is descri

by 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...)

by 323 4y ago

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...)