> the statement "you should follow accounting rules" is so vague it's meaningless
We aren’t quibbling over GAAP versus IFRS. Anyone looking at FTX’s lack of accounting and control and seeing even a shade of familiarity at their firm should speak to a lawyer. Start-ups will be start-ups, but if you’re taking outside money and literally can’t say where your bank accounts are, run the hell away.
Most accounting issues aren't legal issues. Most businesses can't give you an up to the current date balance sheet. Most VCs don't get audited financials for most of their early stage investments. Most financials given to VCs have errors in them, most of the errors will be harmless and wouldn't meet any definition of fraud (legal or pub talk). Virtually none would meet GAAP if audited. Most early stage businesses don't have good management/cost accounting in place and can't actually work out exactly what's going on.
FTX seems to have been doing actual bad stuff - moving assets between companies that would never be done at arms length. From a practical perspective, it's almost sending money to the founder. If someone sees their company doing that, yeah, talk to someone. But that is not an accounting issue.
The chaos and lack of accounting rigor is.. just not rare or surprising.
We aren’t quibbling over GAAP versus IFRS. Anyone looking at FTX’s lack of accounting and control and seeing even a shade of familiarity at their firm should speak to a lawyer. Start-ups will be start-ups, but if you’re taking outside money and literally can’t say where your bank accounts are, run the hell away.