4 ms·

I 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 definitel

I 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 ago
My 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 ago
  Reading 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 ago
  They 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 ago
    They 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
    - HideousKojima 4y ago
      He doesn't seem to mention what third party completed the audit, and given what we know about FTX's accounting now that means it was either an internal audit or SBF was lying.
      - jefftk 4y ago
        Coindesk seems to have obtained the audited financials and reported on them: 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...
    - throwoutway 4y ago
      I assume they were counting the FTT tokens as actually holding value when they were propped up

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 ago

My 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 ago
Reading 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 ago
They 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 ago
  They 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
  - HideousKojima 4y ago
    He doesn't seem to mention what third party completed the audit, and given what we know about FTX's accounting now that means it was either an internal audit or SBF was lying.
    - jefftk 4y ago
      Coindesk seems to have obtained the audited financials and reported on them: 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...
  - throwoutway 4y ago
    I assume they were counting the FTT tokens as actually holding value when they were propped up