• Public

  • Public
  • Network
  • Groups
  • Featured
  • Popular
  • People

Over a year after Sam Bankman-Fried’s trial, perhaps one of the most memorable moments to stick with me was an unexpected one: a brief exchange between prosecutors and BlockFi founder Zac Prince. (FTX’s collapse bankrupted the crypto lender, which had loaned FTX entities hundreds of millions.) BlockFi's Zac Prince: [With] crypto firms, it was much less common to have audited balance sheets because of issues with getting audits as a cryptocurrency firm. Prosecutor: Just to be clear, some of the balance sheets you received from crypto firms were what is called unaudited balance sheets. Prince: I would say the majority of balance sheets that we received from cryptocurrency firms were unaudited. This casual statement about lending hundreds of millions based on scrawled estimates and a “trust me, bro” underscored the deception in crypto executives’ post-collapse claims that FTX was a rare bad actor with aberrant business practices, a black sheep among scores of legitimate businesses. On the contrary, many of FTX’s activities were business as usual in an industry where regulatory enforcement and proper audits were rare, but maximal leverage and risk-taking were par for the course.