This guy has been trying to spread doubt about bitfinex for a long time, but never has much to back it up. A few months ago he went on a big campaign against Tether (tokens associated with Bitfinex), claiming they were created out of thin air. Tether then completed and released an audit by a professional, accredited team of their bank balances (1). I don't personally use Bitfinex, and it's possible some of these accusations are at least partially true, but there's really no evidence to confirm that. Don't buy into this type of FUD without doing your own research.
Some of the claims he makes are disingenuous. Bitcoin Gold has nothing to do with Bitfinex, and is listed on a number of exchanges. It's definitely a pretty sketchy project, but it was a BTC fork and users tend to dislike when their exchange keeps forked tokens to themselves. EOS/IOTA are big projects with large market caps and real teams. Did some weird accounting happen after the Bitfinex hack? Maybe. Did most of the people end up getting their money back? Yes. Does it matter now? Not really. This is the largest BTC exchange (by volume) in the world. They generate tens of millions of revenue from exchange fees every month. There's no clear reason for them to engage in any weird, illegal money schemes at this point, they already have a money printing factory.
There are two key quotes that you need to pay attention to in that document:
This engagement does not contemplate tests of accounting records or the performance of other procedures performed in an audit or attest engagement.
In addition, our services do not include a determination of compliance with laws and regulations in any jurisdiction. All inquiries made throughout the consulting process have been directed toward, and the data obtained from, the Client and personnel responsible for maintaining such information.
In other words, that document is not an audit. Just like previous "audits" published by Bitfinex connected companies, it’s an internal management report created for the management by an accounting firm. Such reports assume that everything they’re told by management is true: why would management lie to themselves? What would be the point?
If you’re an external entity on the other hand, eg a shareholder in the company say who wants an external third party to validate claims made by management, then you will only rely on a real audit made by a company that sends staff to check on those claims personally. This document is not such an audit & it’s authors are at pains to point that out.
Edit: The auditors did confirm bank balances with the holding banks, but did not perform an audit that would find any corresponding liabilities, nor that the claimed Trustee relationship between the company and the individual named on the account had any legal force. What this document shows is that people connected with the company had accounts with the claimed $Xmillion in them in total on the day in question & this was confirmed by the accountants. That’s it - it’s still not an audit.
> Such reports assume that everything they’re told by management is true
No, they checked the balances with the banks. They verified the amount as stated was held by the bank at the time. You can see that in the section that begins "FLLP confirmed each bank account directly with the respective bank"
They stole 15% of every users Bitcoin Cash, it was suppose to be a 1:1 split, but since they don't like bitcoin cash and lists it as bcash, that might be reason why, I expect more "technical difficulties" during the next fork
They didn't 'steal' this, they transferred it to lenders (and/or short sellers).
Bitfinex (unwisely) specified that during the Bcash-Bitcoin fork, lenders would get Bcash for lent-out Bitcoin. However if Alice lends 1 Bitcoin to Bob before the fork and Bob sells it to Carol then Bitfinex will owe both Alice and Carol one Bcash after the fork, but they will only have one to distribute. So they split it up.
This can get worse when Carol lends it out again, etc, etc, and in the end Zack withdraws the Bitcoin. Unbounded liability and potentially no assets. So them paying out 15% less than expected was a pretty good result.
Seriously, makes me wonder if he is just pissed that he sold his tokens for pennies on the dollar, or somehow has short exposure to bitfinex / the crypto space.
Some of the claims he makes are disingenuous. Bitcoin Gold has nothing to do with Bitfinex, and is listed on a number of exchanges. It's definitely a pretty sketchy project, but it was a BTC fork and users tend to dislike when their exchange keeps forked tokens to themselves. EOS/IOTA are big projects with large market caps and real teams. Did some weird accounting happen after the Bitfinex hack? Maybe. Did most of the people end up getting their money back? Yes. Does it matter now? Not really. This is the largest BTC exchange (by volume) in the world. They generate tens of millions of revenue from exchange fees every month. There's no clear reason for them to engage in any weird, illegal money schemes at this point, they already have a money printing factory.
https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co...