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November 15, 2022

Underscoring the need for Compliance and Independent Accounting in Crypto

The collapse of FTX and Sam Bankman-Fried’s empire has sent the crypto industry spinning. While crypto asset prices are looking for their footing, the underpinnings of the crypto ecosystem – the companies that enable crypto’s continued macro growth and adoption – are too looking for their own footing. 

 

FTX was once seen as the pinnacle of crypto innovation. An exchange with zero leverage backed by some of the largest names in both crypto and traditional finance. This facade quickly collapsed, however, in early November as we now know. 

 

But what went wrong? 

 

The collapse of FTX underscores the need for compliance, accountability through accounting, and trusted neutral oversight. These three concepts are fundamentally at the core of what we at Ledgible seek to provide to the digital asset ecosystem.

 

The growth of crypto on a long-term macro trend persists. The world’s largest institutions, enterprises, and tax and accounting professionals continue to adopt cryptocurrencies as an asset class into their systems. Large traditional finance players and novel and growing cryptocurrency players are laying the groundwork for the unglamorous infrastructure of continued crypto asset adoption, regardless of the ups and downs of individual players. 

 

It’s important to recognize that the collapse of FTX was at its core tied to facets of the failings of historical TradFi collapses as well. FTX ran full force into centralization and lack of oversight, two concepts that the fundamentals of blockchain technology reject. Two concepts that Enron adopted, that Lehman adopted, and more.

 

For crypto to persist, as it will, decentralization and accountability are needed in the space – in the unglamorous underpinnings of the ecosystem. As an independent SOC 1 & 2 Type 2 certified solution with its roots in some of the largest cryptos audits in history, that now assists some of the largest institutions and enterprises in the world manage crypto asset accounting, Ledgible is here to grow the tax and accounting infrastructure of both crypto and TradFi players along for the digital asset ride. 

 

The collapse of FTX underscores the need for internal controls, robust accounting protocols, and government regulation of the space. The Ledgible platform is here to serve those end goals, implementing an agile framework that operates at scale, able to keep crypto assets accounting in line with changing regulations, and is able to assure proper crypto accounting as a whole.

 

At Ledgible, we like to say we make crypto, Ledgible – and that’s true. Across the accounting, tax, audit, and technology sectors, the Ledgible platform serves as the underpinnings of crypto data and crypto accounting. Allowing for the ease of adoption of crypto to grow, while ensuring that assets are accounted for and independently assured.

 

At the end of the day, perhaps the crypto space could stand to be a little bit more… Ledgible.

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