Curriculum·Graduate·G406
Audit, Reporting, and the Board
Gemini Earn and Genesis, 2022 to 2023. Gemini offered retail customers a yield product, Earn, that lent their assets to Genesis, a lender that abruptly froze withdrawals in November 2022, trapping around 900 million dollars belonging to roughly 340,000 Earn users.
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Lesson 1 opens on
Gemini Earn, 2022 to 2023
Gemini Earn was a product that let retail customers lend their crypto for yield. What actually happened to the assets was that they were lent to Genesis, a separate lending firm, so an Earn customer's money depended entirely on Genesis remaining able to repay. In November 2022, in the contagion after FTX collapsed, Genesis halted withdrawals, and roughly 900 million dollars belonging to about 340,000 Earn users was frozen.
The lessons
- G406-01What an attestation proves, and Gemini EarnDistinguish an attestation, a narrow point-in-time assurance, from proof that a product is safeabout 32 min · opens on Gemini Earn, 2022 to 2023
- G406-02Financial reporting a regulator will acceptState that financial reporting must reflect economic reality, not a preferred picture of itabout 33 min · opens on Wirecard, June 2020
- G406-03Communicating risk to a boardExplain that a board can only govern a risk it has been given an accurate picture ofabout 33 min · opens on Wells Fargo sales-practice failures, surfacing 2016
- G406-04The disclosure that was owedExplain why a filing that speaks to a risk must not leave out a material event the company already knows ofabout 34 min · opens on Yahoo, disclosure failure charged 2018