Back story: FTX goes bankrupt
FTX, at one point was the third largest crypto exchange in the world and was valued at $32 billion, fell into ruin early November this year.
Its Founder and CEO Sam Bankman-Fried mishandled FTX’s users’ hard-earned money (almost $10 billion) by lending it to Alameda Research, a quantitative trading firm.
The trading firm lost the funds in risky bets, which set the stage for the liquidity crunch that was about to occur.
On 11th November FTX posted via Twitter that the exchange, FTX US, Alameda, and its 130 affiliated companies have filed for Chapter 11 bankruptcy protection in the U.S.
And with that, a new Chief Executive Officer (CEO) John J Ray III was appointed to replace Sam. John is a lawyer who has long parachuted into high-profile corporate disasters, including the failure of Enron and Nortel.
In a U.S. bankruptcy court filing, John didn’t hold back calling FTX out.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” he said.
Now the question that many people in the crypto and finance community are asking is, “Who were the auditors of FTX and why weren’t they able to spot giant red flags?”
There were two different audit firms, namely Prager Metis CPAs LLC and Armanino LLP that were assigned to sign off FTX’s financials for 2020 and 2021.
Armanino LLP signed the financial statements of FTX U.S. whereas Prager Metis signed for FTX Trading LLC.
Armanino LLP
Founded in 1969, Armanino LLP is an independent accounting and consulting firm headquartered in San Ramon, California US.
It is one of the top 25 largest independent accounting and business consulting firms in the United States. The firm serves privately held companies, private individuals, as well as nonprofit organizations, and public entities.
According to their website, they currently have over 2000 employees, and 7000 clients, and could extend their services to more than 100 countries through its membership in Moore – one of the world’s major accounting and consulting organizations.
Armanino is a member of the American Institute of Certified Public Accountants (AICPA), and the Center for Audit Quality. It claims to comply with all professional education requirements and regularly undergoes peer reviews by an independent public accounting firm.
“Based on consistently receiving “clean” opinions in these reviews, we are proud to say that we practice at the highest possible level in the profession,” as written on their website.
Executive Team:
CEO: Matt Armanino is the Chief Executive and a Managing Partner at the firm. He was previously the COO (Chief Operating Officer) of the same.
CFO: John Kogan is the Chief Financial Officer and a Partner at the firm.
COO: Chris Carlberg serves as the Chief Operating Officer.
Services Armanino LLP provides:
Their areas of service include…
- Advisory
- Audit
- Business Application Consulting
- Business Management
- Digital
- Outsourcing
- Risk Assurance
- Strategy and Transformation
- Tax
The firm started providing Crypto & Digital Asset Solutions in 2014, catering to digital asset financial service firms, miners & speakers, funds, token projects, and “crypto-curious” companies.
Armanino’s TrustExplorer is a blockchain-powered transparency platform that helps its crypto-native clients with
- Real-Time Attest
- Proof Of Reserves
- Track complex crypto transactions for tax clarity, accurate reporting, and portfolio management.
It has served crypto companies like MasterCoin, and BitMEX – another cryptocurrency derivatives exchange.
Prager Metis CPAs LLC
Prager Metis CPAs was formed in January 2013 by the merger of Prager and Fenton LLP and Metis Group LLC – two highly-respected accounting firms.
Headquartered in New York, USA it is an independent public accounting and international advisory firm. It has over 100 partners and principals, 600+ team members, and 24 offices across the world including in the USA, the UK, and Asia.
Executive team:
CEO: Glenn L. Friedman is the Chief Executive Officer and a Co-Managing Partner at Prager Metis CPAs.
CFO: Nicholas Valentini is currently serving as the Chief Financial Officer at the firm.
COO: Craig Michaelson serves as the Chief Operating Officer at the firm and is a Partner in the Tax and Advisory Departments.
Services Prager Metis provides:
The firm offers a full range of
- Accounting
- Audit
- Tax
- Business management
- Consulting services
- International Services
Prager Metis is the first CPA firm to officially open its Metaverse headquarters in the metaverse platform Decentraland.
Their range of services in the Meta Verse includes:
- Audit
- Tax
- Consulting
- Business management
- International services.
- Accounting and Financial advisory services for individuals and businesses in the metaverse.
“The opening of a metaverse office reflects Prager Metis’ belief that the metaverse will be the future and technology will continue to influence the way the world operates,” said Glenn Friedman, CEO of Prager Metis in one of their website blogs.
