On Easter Sunday the current CEO of FTX released its assessment of FTX’s lack of cyber, financial, and internal accounting controls. What a mess it is.
The CEO of FTX released a report on Easter Sunday of the mess that FTX was in when the company fell into bankruptcy. This cryptocurrency exchange saw billions of dollars fly threw its accounts and God only knows who was behind the transactions and who was receiving the transactions.
Bob Bishop unraveled the results of the current CEO’s Easter report on Twitter.
56 entities within FTX did not produce financials. Numerous entities used QuickBooks as their accounting software.
2 of 11: “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.” pic.twitter.com/tJYxZLb4MO
— Bob Bishop – Forensic Investigator (@BobBish40288847) April 10, 2023
Checks to be deposited were treated like junk mail. Numerous checks became stale and were never cashed. Numerous accounts were created that could have been used to launder money.
4 of 11: “Other accounts were opened using pseudonymous email addresses, in the names of shell companies.” An ideal environment for money laundering. pic.twitter.com/zKe0auxQPt
— Bob Bishop – Forensic Investigator (@BobBish40288847) April 10, 2023
Numerous entities could borrow money from the company and Alameda Group could borrow up to $65 billion.
6 of 11: “Certain preferred customers and market makers had a borrow value greater than zero and in amounts up to $150 million. Alameda alone had a borrow value set to $65 billion”
— Bob Bishop – Forensic Investigator (@BobBish40288847) April 10, 2023
Cybersecurity issues were ignored by management at FTX. Accounts could easily be hacked.
8 of 11: “The FTX Group kept virtually all crypto assets in hot wallets that could subject to hacking.”
— Bob Bishop – Forensic Investigator (@BobBish40288847) April 10, 2023
Cyber threats were real and the company did not implement controls to address these threats.
10 of 11: “The FTX Group did not implement controls sufficient to protect its network endpoints, such as laptops and desktops, from potential security threats.”
— Bob Bishop – Forensic Investigator (@BobBish40288847) April 10, 2023
The document released should be in every accounting curriculum to teach students how to not control a company.
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— Bob Bishop – Forensic Investigator (@BobBish40288847) April 10, 2023
