TrueUSD’s Reserves Were Attested by Former FTX.US Accounting Team

Armanino’s digital asset team rebranded itself to The Network Firm, as CoinDesk reported, to continue performing audits and attestations after the collapse of FTX.

AccessTimeIconJun 28, 2023 at 5:49 a.m. UTC

The attestation of embattled stablecoin TrueUSD's Proof of Reserves was performed by the same team that once worked with Sam Bankman-Fried on the books for FTX.US.

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  • As CoinDesk reported in March, The Network Firm was born out of accounting firm Armanino’s digital-asset practice.

    Armanino stopped conducting crypto audits last year, underscoring the increasing 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.

    FTX was criticized for its lack of internal controls, with John Ray III, its new CEO appointed for bankruptcy proceedings, saying it “did not keep appropriate books and records or security controls”

    "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," Ray said in a November court filing.

    Armanino’s audit for 2021 did not provide an opinion on the FTX.US or FTX Trading internal controls over accounting and financial reporting.

    CoinDesk previously reported that in 2019, the Public Company Accounting Oversight Board highlighted deficiencies in Armanino's quality-control processes, and the firm later faced controversy for its audit of, which overstated its cash balance by $30 million and improperly recognized revenue, leading to Armanino's resignation in September before a class-action lawsuit against's executives.

    Executives at 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.

    “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,” Archblock’s Chief Financial Officer Alex de Lorraine previously told CoinDesk.

    TrueUSD didn't immediately respond to a further request for comment.

    The stablecoin issuer 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.

    A recent attestation by The Network Firm showed that TrueUSD has $26,000 worth of funds at U.S. depository institutions, though it didn’t specify which ones.

    Edited by Parikshit Mishra.


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