Paradigm, BlockFi, Genesis and other companies did not have access to audited financial statements prior to investing or loaning billions to FTX, FTX.US. and Alameda Research, according to testimonies given in the trial of Sam Bankman-Fried. Rather, these investors and lenders looked at unaudited financial statements and spoke with the executives at these companies to determine critical pieces of information like FTX’s cash flow, its liabilities, its current assets and net asset value.
Everyone, including regulators, is paying renewed attention to the FTX and Alameda Research collapse. The amateur-hour practices coming out in that courtroom are unlikely to impress anyone in traditional finance or in policy, underscoring the distance crypto still has to cover to be taken seriously by the TradFi world.
Source: The Sam Bankman-Fried Trial Is Revealing Crypto’s Amateur-Hour Ways
