131–140 of 506 posts
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Armanino is not a top firm. If you're not using Big 4, there's a reason.
There are plenty of reasons for not using a Big 4 their prices being one. They are not the be all and end all of auditing.
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For now at least with Coinbase it is the investors funds at risk, not the customers funds. And that example shows how hard it is to run such a business profitably.
> ... with Coinbase it is the investors funds at risk, not the customers funds Oh boy are you in for a surprise: "In its quarterly report, Coinbase added a risk disclosure: if the company were to file for bankruptcy, the court might treat customer assets that the exchange is custodian for -- their Bitcoin, Dogecoin or whatever -- as Coinbase’s assets. And they’d be at the back of the line for repayment, forcing norma…
> Moreover, because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors. This may result in customers finding our custodial services more risky and less attractive and any failure to increase our customer base, discontinuation or reduction in use of our platform and products by existing customers as a result could adversely impact our business, operating results, and financial condition.
> Further, we place great importance on safeguarding crypto assets we custody and keeping them bankruptcy remote from our general creditors, and in June 2022 we updated our Retail User Agreement to clarify the applicability of UCC Article 8 to custodied crypto asset — the same legal protection that our institutional custody and prime broker clients also rely upon. UCC Article 8 provides that financial assets held by Coinbase are not property of Coinbase and not subject to the claims of its general creditors. In light of UCC Article 8, we believe that a court would not treat custodied crypto assets as part of our general estate; however, due to the novelty of crypto assets, courts have not yet considered this type of treatment for custodied crypto assets
Source: page 96: https://s27.q4cdn.com/397450999/files/doc_financials/2022/q3...
Even an audited exchange like Coinbase that is trying to do everything right is still self reporting loses like $430M in quarter 1 of 2022 just by operating their business correctly. Not your keys, not your crypto. Anyone storing their crypto on any exchange has this risk.
Even an audited exchange like Coinbase that is trying to do everything right is still self reporting loses like $430M in quarter 1 of 2022 just by operating their business correctly. Not your keys, not your crypto. Anyone storing their crypto on any exchange has this risk.
For now at least with Coinbase it is the investors funds at risk, not the customers funds. And that example shows how hard it is to run such a business profitably.
https://finance.yahoo.com/news/coinbase-keep-customer-balanc...
Mazars is likely wondering if they are going to be the next Arthur Andersen before this is all over. Good luck finding another firm when one of the top firms in the world drops you like a hot potato.
They haven't done anything wrong AFAIK; they didn't sign off on an audit, and withdrew, which is the reality of many smaller accounting practices taking on unfamiliar clients. Arthur Anderson knowingly fudged the numbers at Enron, and provided both accounting and consulting services, which was a big conflict of interest. The consulting arm came up with new type of revenue opportunities (energy contracts), and the acc…
Arthur Andersen messed up big time, not in the least because their Chinese walls failed in every way imaginable but the parallel is pretty close: all of these companies are chasing new markets with abandon when in fact they should out of caution rather than regulatory pressure slow down and do their jobs properly because the financial world depends to a very large extent on that.
Earlier quoted context omitted.
> ... with Coinbase it is the investors funds at risk, not the customers funds Oh boy are you in for a surprise: "In its quarterly report, Coinbase added a risk disclosure: if the company were to file for bankruptcy, the court might treat customer assets that the exchange is custodian for -- their Bitcoin, Dogecoin or whatever -- as Coinbase’s assets. And they’d be at the back of the line for repayment, forcing norma…
Ouch. Thanks for that. I wonder why the normal customer funds segregation rules do not apply to crypto assets.
Basically, there's no legal precedent. It's anyone's best guess.
Earlier quoted context omitted.
> ... with Coinbase it is the investors funds at risk, not the customers funds Oh boy are you in for a surprise: "In its quarterly report, Coinbase added a risk disclosure: if the company were to file for bankruptcy, the court might treat customer assets that the exchange is custodian for -- their Bitcoin, Dogecoin or whatever -- as Coinbase’s assets. And they’d be at the back of the line for repayment, forcing norma…
Ouch. Thanks for that. I wonder why the normal customer funds segregation rules do not apply to crypto assets.
Earlier quoted context omitted.
Even if you have the keys, it’s not your store of value, as people will find out when this implodes. What are your keys worth if the price of Bitcoin is close to zero?
Bitcoin has already reached 50% of the 27 year lifespan of the average fiat currency. https://cointelegraph.com/news/bitcoin-is-already-at-40-of-a...
Even an audited exchange like Coinbase that is trying to do everything right is still self reporting loses like $430M in quarter 1 of 2022 just by operating their business correctly. Not your keys, not your crypto. Anyone storing their crypto on any exchange has this risk.
How do you lose so much money when your business it to charge fees? You'd have to do something really stupid to not make money.
FTX was also audited by a top firm, Armanino!Changed nothing... In the article says: Following the collapse of FTX, Paul MacIntosh, EY’s US financial services crypto co-leader, said on LinkedIn that proof of reserves reports do not assess companies’ internal controls, “which ultimately was the downfall of FTX”.
Exactly. And people act like this is a problem with cryptcurrency, but it's really a problem with people in corporations behaving badly.