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Crypto alternate FTX filed for Chapter 11 chapter safety on Friday with an eleven-figure gap in its books. As observers remarked on the speedy deterioration of then-CEO Sam Bankman-Fried’s buying and selling empire, a pure query emerged: Who was FTX’s auditor?
FTX Buying and selling LLC, the alternate’s worldwide arm, labored with auditing agency Prager Metis, in response to monetary statements seen Friday by CoinDesk. The mid-sized agency lists 24 working areas on its web site, together with the “metaverse.”
A now-deleted publish on the corporate’s web site, printed in June 2022 mentioned Prager Metis was “proud to assist FTX US.” (The web page was nonetheless viewable in Google’s search cache.)
The 2020 and 2021 FTX US audits have been carried out by New York Metropolis-based agency Armanino, in response to paperwork considered by CoinDesk.
A cursory web search reveals Prager Metis supplies tax, auditing and advisory companies, notably to the leisure and music industries, although it has no shoppers named on its web site. It additionally surfaces extra spicy fare: The corporate introduced plans to open an workplace within the Decentraland metaverse in February 2022, and can sponsor an upcoming metaverse social gathering for the scantily clad Decentraland Babydolls.
On its web site, FTX mentioned it had efficiently undergone a U.S. GAAP monetary audit for 2021.
As FTX bumped into bother this week, many critics pointed to FTX’s opaque enterprise operations and the way a scarcity of oversight could have allowed Bankman-Fried and his inside circle of executives to hide probably fraudulent conduct.
“I don’t know something about FTX,” mentioned Jerry Eitel, the companion emeritus and chief metaverse officer at Prager Metis. “I’m retired,” Eitel added, earlier than disconnecting on the telephone. (Eitel is a one-time CoinDesk contributor.)The top of Prager Metis’ audit apply couldn’t be reached for remark.
Enterprise capital big Sequoia, which wrote off everything of its $150 million funding in FTX this week, justified its funding within the firm by citing FTX’s robust 2021 financials. The enterprise fund touted FTX’s $1 billion in revenues and $250 million in working earnings as proof of the corporate’s legitimacy, each figures CoinDesk’s leaked Prager Metis reviews corroborate.
“On the time of our funding in FTX, we ran a rigorous diligence course of,” the group wrote in a letter to traders.
Spokespeople for FTX and FTX US didn’t reply to a request for remark. The folks didn’t reply when requested if the agency, M Group Strategic Communications, was nonetheless representing the corporate.
Extra reporting by CoinDesk’s Ian Allison.
UPDATE (21:25 UTC): Updates textual content in third paragraph and provides image displaying what accounting agency’s FTX web site regarded like earlier than it was deleted.
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