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> Full GAAP audit or we all assume you're broke. FTX passed a GAAP audit and was still broke. Safer just to take custody of your coins while your still can. 2
by jefftk 4y ago
> Full GAAP audit or we all assume you're broke.
FTX passed a GAAP audit and was still broke. Safer just to take custody of your coins while your still can.
2021-08-27: "Both FTX and FTX.US have completed requirements to pass the US Generally Accepted Accounting Principles (GAAP) audit" https://blockworks.co/news/ftx-joins-coinbase-kraken-with-us-gaap-audit-pass https://blockworks.co/news/ftx-joins-coinbase-kraken-with-us...
- JumpCrisscross 4y ago> FTX passed a GAAP audit Do we have a source mentioning the auditor?
- jefftk 4y agoPrager Metis for international, Armanino for US: https://www.coindesk.com/business/2022/11/11/meet-the-metaverse-night-clubloving-audit-firm-that-presided-over-ftxs-financials/ https://www.coindesk.com/business/2022/11/11/meet-the-metave...
- JumpCrisscross 4y agoPrager Metis and Armanino worked with FTX, but I can’t find anything showing they completed an audit. (Far from blameless. Both seem riddled with issues [1].) [1] https://www.ibtimes.com/crypto-auditors-under-fire-ftx-meltdown-highlights-fundamental-need-exchanges-change-audit-3644551 https://www.ibtimes.com/crypto-auditors-under-fire-ftx-meltd...
- mtmail 4y agoOP quoted "have completed requirements to pass" so that might be the start of the audit, not passing.
- jefftk 4y ago"CoinDesk obtained the audited financial statements of West Realm Shires, also known as FTX US, and FTX Trading Ltd., the combined offshore Bahamas-based entity that includes an exchange catering to non-U.S. customers and Alameda, the proprietary trading operation. It’s not clear why FTX commissioned two different audit firms to audit its 2020 and 2021 financial statements. The reports by Armanino LLP, which signed the report for the U.S. operation, and by Prager Metis LLP, which signed the opinion for the offshore operations, were issued at the end of March 2022." https://www.coindesk.com/layer2/2022/11/18/a-complete-failure-of-corporate-controls-what-investors-and-accountants-missed-in-ftxs-audits/ https://www.coindesk.com/layer2/2022/11/18/a-complete-failur...
- koreanguy 4y ago
- dragonwriter 4y ago> Prager Metis and Armanino worked with FTX, but I can’t find anything showing they completed an audit. The FTX et al. bankruptcy filing (by the post-SBF CEO) refers to the existence of audited financials for the WRS silo (which includes FTX.US) by Armanino and Dotcom silo (which includes FTX proper) by Prager Metis, with the other silos not having audited financials. This seems to be a fairly strong indication that the audits were completed.
- deleted 4y ago[deleted]
- fabian2k 4y agoFTX had many parts, did that audit actually cover all of them or was that just for a subset of companies?
- jefftk 4y agoIt probably didn't cover all of them: all of the announcements I can find from the time just talk about FTX US and International. But if you're trying to decide whether to keep your money in another exchange, and they talk about how they have passed a GAAP audit "did the audit actually cover everything I care about" is still a live question.
- coffeebeqn 4y agoBasically if you want to keep your money in a regulated institution, don’t use a crypto exchange. You can be your own bank or just sell the crypto and buy some funds where you know some basic facts about where your money is and who can touch it. I can’t imagine why anyone would risk keeping their assets in binance. Do you know basic facts like which jurisdiction in the world they are even based in? Optimistically it sounds like a 50% chance they are actually fine and 50% chance they’re on the path of FTX. Big risk with no reward other than minor convenience
- hgsgm 4y agoCoinbase and Gemini are regulated USA exchanges. Gemini had been fined for violating regulations. (Gemini Earn was a third-party fraudulent investment product, enabled by Gemini company. FTX was a fly-by-night international exchange like Binance. I don't understand FTX.us . It was US regulated? Did people lose money in FTX.us exchange?
- hef19898 4y agoNo need to speculate, there were to seperate "audits", which were unrelated from each other, and only covered parts of the enterity of FTX. And Pager Matis' selling point seems to have been a Metaverse HQ...
- 4y ago
- anovikov 4y agoWhat's the value of coins if with Binance down, most certainly Bitcoin will be down too as it was propped up with fake printed USDT, which will collapse as well, and with them evaporating, every other coin will follow? If Binance falls, all crypto will vanish. And good riddance.
- coffeebeqn 4y agoBTC won’t vanish but most all other ones will revert to their natural state outside of the last few years bubble (zero-ish). I’m sure BTC will still be worth some thousands. And I’m a BTC long term skeptic
- digitaltrees 4y agoAt least Tulip bulbs can be planted. Crypto just burns electricity. The value of crypto is actually negative at this point.
- m348e912 4y agoPeople have been making the crypto tulip comparison since when bitcoin was worth less than $100. Not saying you're wrong at this point, but if you're right, you're about as right as a broken clock.
- digitaltrees 4y agoTrue but I have been making them from the beginning. I actually think it would be good for people to see crypto as worthless. Maybe then they would spend it instead of holding it and it could actually act as a currency.
- lostmsu 4y ago> Maybe then they would spend it Why? Do you want to buy?
- eftychis 4y agoI don't think FTX actually applied or passed GAAP. From the filings it is clear they couldn't have. They barely have records of their liabilities, and definitely not of their assets. I am not even touching co-mingling of different classes of accounts. The statement you are referencing is another lie to customers and investors. I know they employed a "Decentraland" sketchy "auditor." But that's it. It is like employing me to do your haircut -- you are 100% screwed and not getting a haircut, but some hair will be cut.
- FormerBandmate 4y ago> Both FTX and FTX.US have completed requirements to pass the US Generally Accepted Accounting Principles (GAAP) audit This is legally meaningless. Literally anyone can say they completed requirements to pass, they didn't actually pass
- jefftk 4y agoMy point is not "FTX's books were in good shape"; with the benefit of hindsight they clearly weren't. Instead, my point is that an exchange saying that they passed a GAAP audit isn't the level of positive signal my parent seems to think it is.
- brazzledazzle 4y agoReading it doesn’t it say they have completed the requirements to pass but haven’t actually passed? Seems like the kind of word play that should send red flags.
- kevin_thibedeau 4y agoThey didn't say that they passed, just that they claimed to "complete requirements" needed to pass. The financial engineering version of lying with facts like "assembled in USA from foreign components".
- jefftk 4y agoThey claimed to have passed: 2021-07-21 "Yesterday, FTX became the first (?) crypto derivatives exchange to complete a GAAP audit!" -- https://mobile.twitter.com/sbf_ftx/status/1421354721911115776 https://mobile.twitter.com/sbf_ftx/status/142135472191111577... 2021-08 -26: "Both @FTX_Official and @ftx_us have passed US GAAP audits and plan to continue getting audits going forward." --https://twitter.com/SBF_FTX/status/1431087427154849795 https://twitter.com/SBF_FTX/status/1431087427154849795
- moffkalast 4y agoBinance just unverified everyone yet again, it's safe to say they're trying to prevent people from pulling out.
- deleted 4y ago[deleted]
- koalala 4y agoi just checked this and i'm still verified. i'm in europe though.
- worik 4y agoFirst up, best dressed
- RealityVoid 4y agoI'm also still verified. But I also pulled out all my assets. I don't believe Binance to be on the brink of bankruptcy, but better safe than sorry.
- more_corn 4y agoTake your money out while you still can.
- digitaltrees 4y agoMaybe CZs attempt to take down a competitor by leaking information wasn’t a good idea after all. Sad to see people hurt as it backfires in his face. No amount of public relations or spin will save binance at this point. The run has begun. It will seem slow at first and then all at once. The only thing that would save it would be a bail out by the Chinese government.
- species9606 4y agoAs CZ has said repeatedly, they’re not a Chinese company. If the CCP bails them out, they’ll have an entirely new set of reputation problems.
- digitaltrees 4y agoYou can have an audit on Monday and a founder transfer all the assets to an affiliate on Tuesday so timing risk makes this stuff irrelevant. Maybe time to make crypto decentralized?
- oblio 4y ago> Maybe time to make crypto decentralized? Is there money in that?
- stanleydrew 4y agoIf there were money in that I think we'd have seen it by now.
- conorcleary 4y agoWe already have it.
- m3kw9 4y agoHow did gaap value their magic coins?
- scoofy 4y agoLikely marked to market, but it honestly doesn't matter. In a world where wash sales are effectively free from any friction whatsoever, you can set a market value of whatever you want. I've been a crypto skeptic for all this time especially NFT's exactly because I was at the right age to understand how wash sales drove the dot-com bubble, and looking at the defi space, wash sales could explain how all of these insane valuations kept happening.
- everybodyknows 4y agoHmm, could wash trading have played some part in the apparent success of Donald Trump's "digital trading cards"? https://www.coindesk.com/web3/2022/12/16/trump-nft-collection-sells-out-price-surges/ https://www.coindesk.com/web3/2022/12/16/trump-nft-collectio...
- dragonwriter 4y ago> FTX passed a GAAP audit and was still broke Not a finance pro, but as I understand it: A GAAP audit is not a test for whether or not you are broke. It is also not a test of whether your financials are honest (except in a very limited sense). It is a test of whether or not your various pieces of financial information are internally consistent given a standard set of definitions of how pieces should relate, and therefore that summary documents like the balance sheet are accurate, assuming the accuracy of underlying records. While it is an important quality of work check for internal accounting, if you wouldn’t trust a company without a GAAP audit, there are very few scenarios where having the audit should significantly move the needle of trust.