The Auditing and Legal Implications of the FTX Collapse
Advisor(s)
Jacob Crowley
Confirmation
1
Document Type
Poster
Location
McIntosh Activities Room
Start Date
19-4-2024 12:00 PM
End Date
19-4-2024 12:50 PM
Abstract
This research provides background on the third largest cryptocurrency exchange during the time of its operations, FTX Trading Ltd. After providing a brief backstory, the paper outlines situations that took place within the company that led to its demise. These situations demonstrate the relationship between FTX Trading Ltd. and Alameda Research, the organization’s improper usage of customer funds, the violation of the Foreign Corrupt Practices Act, the company’s misleading statements and acts to the public, illegal computer code changes, a lack of governance and risk management procedures, auditing procedures that were not followed, noncompliance with regulations, the lack of professional judgment and skepticism on behalf of the external auditor and the inherent lack of an internal audit function. These issues were major in the dissolution of FTX Trading Ltd., but were not the only events that took place that led the company to its imminent bankruptcy. FTX could have still been here today if the company did not find themselves in these situations. Additionally, if proper risk measures were implemented, the same could be true.
Recommended Citation
Wilkins, Becky, "The Auditing and Legal Implications of the FTX Collapse" (2024). ONU Student Research Colloquium. 24.
https://digitalcommons.onu.edu/student_research_colloquium/2024/Posters/24
Level of Access
Open Access
Open Access
Available to all.
The Auditing and Legal Implications of the FTX Collapse
McIntosh Activities Room
This research provides background on the third largest cryptocurrency exchange during the time of its operations, FTX Trading Ltd. After providing a brief backstory, the paper outlines situations that took place within the company that led to its demise. These situations demonstrate the relationship between FTX Trading Ltd. and Alameda Research, the organization’s improper usage of customer funds, the violation of the Foreign Corrupt Practices Act, the company’s misleading statements and acts to the public, illegal computer code changes, a lack of governance and risk management procedures, auditing procedures that were not followed, noncompliance with regulations, the lack of professional judgment and skepticism on behalf of the external auditor and the inherent lack of an internal audit function. These issues were major in the dissolution of FTX Trading Ltd., but were not the only events that took place that led the company to its imminent bankruptcy. FTX could have still been here today if the company did not find themselves in these situations. Additionally, if proper risk measures were implemented, the same could be true.