December 16, 2022
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As long as crypto has been a thing, there have been crypto skeptics. One area that has invited a lot of skepticism is the accounting and auditing of crypto. This is because many crypto businesses—miners, exchanges, traders—haven’t really made accounting and assurance priorities for their businesses. Despite their rapid growth, most of these businesses have stayed private, avoiding the need to comply with accounting and auditing rules that public US companies must abide by. Now that the crypto winter has arrived with billions of dollars seemingly vaporized, folks who have been pointing out the lack of transparency around crypto businesses’ accounting for years aren’t exactly surprised.
Firms like FTX and Celsius collapsed in spectacular fashion, and as their practices are being more closely scrutinized, people don’t like what they see. The crypto players that remain have to contend with a trust problem now. So what’s a nascent industry with a credibility problem to do? Well, you might think they’d go to great lengths to button things up. You know, really win people back with an impressive display of transparency and accountability. Maybe they’d even consider engaging a firm with TRUST as a core service offering.
You’d think! But nah.
Several crypto exchanges, including Binance Holdings Ltd. and Crypto.com, in recent months have hired outside auditors to provide a proof of reserves report, an increasingly popular type of attestation that can show the business is solvent and has enough assets to cover its liabilities.
The process aims to give investors certainty that their tokens are covered by reserves and their funds are safe, but the reports aren’t as thorough as an audited financial statement.
Binance on Wednesday said it appointed accounting firm Mazars to independently verify its reserves. Crypto.com plans to release an audited proof of reserves in the coming weeks, a spokeswoman said. Several other exchanges have announced their own efforts to build out their proof of reserves systems in varying ways, not all of them involving an outside accounting firm.
These auditors don’t personally sign the attestations, unlike reviews of a public company’s annual financial statements. The proof of reserve attestations aren’t public, but some companies such as Kraken share reserves data with their customers. Kraken allows customers to independently verify that their balances are backed by assets secured by the exchange.
Nothing like some half-measures to really win people over. How many times in the past several months have crypto moguls said something like, “We have sufficient assets.” So I guess now they’ll just show you the numbers, and you can verify them yourself. No need to get professionals involved.
Many people—including me—have been critical of auditing in all kinds of ways for years. The largest firms that practice it, especially, have fallen short of its ideals in countless ways, as do current accounting standards. Neither has really evolved to properly function within the business world as it exists now, that includes crypto. “Crypto auditing and accounting is very much still a work in progress,” says accounting professor Sean Stein Smith.
You know what they could use? Auditors! Accountants! Despite all the shortcomings, I think most people would like some GAAP financials and a genuine audit courtesy of a legacy audit firm. Try it! Maybe before all the money’s gone.
“Can your boss make you sleep at work?” is the headline at Fast Company, which seems like the wrong question. The right question is: “Should you be working for a boss that makes you sleep at work?” I’m strongly inclined to say, “No,” but Twitter still has some employees left so I guess there are people who would answer differently.
“He’s now making [employees] sleep at Twitter,” California state senator Scott Wiener told the BBC. Although there’s no other evidence that Musk is forcing anyone to move into Twitter’s headquarters, he has sent midnight emails insisting on “long hours at a high intensity” and asking only the most “hard-core” workers to stay at the company.
Okay, sure. But mandatory sleepovers? Seems questionable. The article spoke to someone who provides a technical answer:
Whether you’re a salaried or hourly employee, the short answer is that it’s legal to ask you to sleep in the office—and your boss can fire you if you refuse, confirms HR professional and employment lawyer Kate Bischoff.
Right, so legally your boss can ask you to sleep at the office, but again, it’s another question if you should be working for that boss. And again, I’d say, no, but not everyone has that option.
And as Bischoff points out, losing a job could be particularly devastating for workers on Twitter-sponsored visas who would be at risk of deportation. “They don’t have much of a choice. If they don’t sleep in the Twitter office, they may have to move back to their country of residence,” says Bischoff.
Yeesh. I’ve witnessed my fair share of dehumanizing behavior in the workplace, but not allowing employees to go home to sleep in their own bed while hanging their employment and residency over their head is a particularly insulting way to crush someone’s dignity. So it’s quite a thing that’s probably happening.
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