PWC, one of the “Big Four” auditors and one of the largest professional services networks in the world, recently released a report on the bankrupt crypto exchange’s Bahamas subsidiary, FTX Digital Markets a Bahamian subsidiary of the bankrupt crypto exchange. The report showed that the entity’s accounting records are limited, and it also noted that “there is little distinction between what potentially represents customer money and corporate funds.”
FTX Joint Provisional Liquidators Continue Investigation of Bahamian Subsidiary
In mid-November 2022, following the Chapter 11 bankruptcy filing by the exchange FTX and its numerous subsidiaries, Bahamian regulators appointed Kevin Cambridge and Peter Greaves of PWC as joint provisional FTX liquidators in the proceedings.PWC recently announced that the crypto exchange Bahamas corporation FTX Digital Markets reportedly commingled customer fundsreport
FTX Digital Markets essentially kept “limited accounting records,” and PWC auditors noted that “there seemed to be little distinction between what potentially represented customer money and company funds.” Further, along with the alleged mixing of funds, data was also reportedly mixed among the company’s broader affiliates “with little or no segregation applied.”
Auditors discovered $219.5 million in cash held at various banks and have asked financial institutions to recover the funds; PWC also described various properties purchased by FTX executives in the Bahamas, and further noted that FTX Digital had approximately $3 million in ancillary He noted that they also owned assets. In addition to the discovered assets, a significant portion of the crypto assets are not under the control of the FTX Joint Provisional Liquidators due to the $323 million hack attributed to FTX International.
“The Joint Provisional Liquidators have requested the transfer of $46.7 million of [Tether] from an account in the name of FTX Digital” and they are awaiting the transfer of these assets into their custody, the report from the PWC auditors further disclosed. The report also calls for further investigation into the company’s “cash management,” “prior transactions,” and “customer transfers. “FTX’s joint provisional liquidators say they continue to employ about 16 people for ongoing investigations and a “potential restructuring of the business.”
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