The Network Firm, a team that once worked with Sam Bankman-Fried on the books for FTX.US, recently attested embattled stablecoin TrueUSD’s Proof of Reserves. As journalists reported in March, The Network Firm was born out of accounting firm Armanino’s digital-asset practice. Armanino stopped conducting crypto audits last year, highlighting the difficulty for crypto firms to secure audits and reserve attestations from prominent accounting firms, with Mazars also halting proof-of-reserves work for crypto clients.
John Ray III, FTX’s new CEO appointed for bankruptcy proceedings, said it “did not keep appropriate books and records or security controls” and that he had never in my career seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. Armanino’s audit for 2021 did not provide an opinion on the FTX.US or FTX Trading internal controls over accounting and financial reporting.
Archblock, which supports the TrueUSD stablecoin, have previously endorsed the Armanio team in prior emails to CoinDesk and said they would continue to use The Network Firm. Alex de Lorraine, Archblock’s Chief Financial Officer, previously told journalists, “The firm may be new, but the partners have been working in the industry for a long time, and many of the team members were part of the initial attestation engine.”
The Network Firm’s recent attestation showed that TrueUSD has $26,000 worth of funds at U.S. depository institutions, though it didn’t specify which ones. TrueUSD is currently trying to shore up confidence in its stablecoin, which has de-pegged, as it reiterates that its exposure to Prime Trust – which has been placed into receivership by authorities in Nevada – is limited.