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...
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.
This is legally meaningless. Literally anyone can say they completed requirements to pass, they didn't actually pass
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.
2021-07-21 "Yesterday, FTX became the first (?) crypto derivatives exchange to complete a GAAP audit!" -- 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
The only thing that would save it would be a bail out by the Chinese government.
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.
Do we have a source mentioning the auditor?
[1] https://www.ibtimes.com/crypto-auditors-under-fire-ftx-meltd...
https://www.coindesk.com/layer2/2022/11/18/a-complete-failur...
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.
Maybe time to make crypto decentralized?
Is there money in that?
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.
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
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?
No; this is covered in detail in the FTX et al. bankruptcy filing.
Sure FTX (the audited entity) really did have a piece of paper saying “magic beans company owes FTX $1bn in bitcoin” and all a GAAP audit would do is look at that paper and say “yep, this paper is worth $1bn (with maybe some repayment risk discount).” Maybe a good audit team tries to understand who really owns magic beans corp, but it’s easy to hide things like that.
FTX the audited entity could be totally fine, but then the shells are where the problem lies.
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.
https://www.coindesk.com/web3/2022/12/16/trump-nft-collectio...
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.
Why? Do you want to buy?
It's effectively one group of greedy people feeding off people that are greedy too but a bit later to the musical chairs game. And so they end up without chairs, but if you start such a game you already know that somebody is going to end up without a chair, you just hope it won't be you.