full title "first interim report of John J. Ray III to the independent directors on control failures at the FTX exchanges", shortened for HN length limits
Meat begins at page 7, some random "fun" quotes:
> Fifty-six entities within the FTX Group did not produce financial statements of any kind. Thirty-five FTX Group entities used QuickBooks as their accounting system and relied on a hodgepodge of Google documents, Slack communications, shared drives, and Excel spreadsheets and other non-enterprise solutions to manage their assets and liabilities
> Approximately 80,000 transactions were simply left as unprocessed accounting entries in catch-all QuickBooks accounts titled “Ask My Accountant.”
> A June 2022 “Portfolio summary” purporting to model cryptocurrency positions held by Alameda stated, with respect to valuation inputs for certain tokens, that Alameda personnel should “come up with some
numbers? idk.” In an internal communication, Bankman-Fried described Alameda as “hilariously beyond any threshold of any auditor being able to even get partially through an
audit,” adding:
> Alameda is unauditable. I don’t mean this in the sense of “a major accounting firm
will have reservations about auditing it”; I mean this in the sense of “we are only
able to ballpark what its balances are, let alone something like a comprehensive
transaction history.” We sometimes find $50m of assets lying around that we lost
track of; such is life
> A June 2022 “Portfolio summary” purporting to model cryptocurrency positions held by Alameda stated, with respect to valuation inputs for certain tokens, that Alameda personnel should “come up with some numbers? idk.” In an internal communication, Bankman-Fried described Alameda as “hilariously beyond any threshold of any auditor being able to even get partially through an audit,” adding: > Alameda is unauditable. I don’t mean this in the sense of “a major accounting firm will have reservations about auditing it”; I mean this in the sense of “we are only able to ballpark what its balances are, let alone something like a comprehensive transaction history.” We sometimes find $50m of assets lying around that we lost track of; such is life
Yikes. Did SBF just not give a damn about anything? The more I see stuff like this, the more I'm convinced that this wasn't fraud, this was just historically awful management by a few kids that had no business running a lemonade stand let alone a multi billion dollar crypto exchange.
Meat begins at page 7, some random "fun" quotes:
> Fifty-six entities within the FTX Group did not produce financial statements of any kind. Thirty-five FTX Group entities used QuickBooks as their accounting system and relied on a hodgepodge of Google documents, Slack communications, shared drives, and Excel spreadsheets and other non-enterprise solutions to manage their assets and liabilities
> Approximately 80,000 transactions were simply left as unprocessed accounting entries in catch-all QuickBooks accounts titled “Ask My Accountant.”
> A June 2022 “Portfolio summary” purporting to model cryptocurrency positions held by Alameda stated, with respect to valuation inputs for certain tokens, that Alameda personnel should “come up with some numbers? idk.” In an internal communication, Bankman-Fried described Alameda as “hilariously beyond any threshold of any auditor being able to even get partially through an audit,” adding: > Alameda is unauditable. I don’t mean this in the sense of “a major accounting firm will have reservations about auditing it”; I mean this in the sense of “we are only able to ballpark what its balances are, let alone something like a comprehensive transaction history.” We sometimes find $50m of assets lying around that we lost track of; such is life