Our Story and Approach at the Intersection of Accounting & Digital Assets
Since early this year, The Network Firm has been the recipient of accidental or willful misrepresentations in digital and social media about who we are. This is our effort to tell the story and provide necessary clarity about our firm, our history, and our approach to the industry.
Many of our current team members were founding members of the Digital Assets Industry practice at a Top 20 US Accounting firm, Armanino LLP, which grew to 75+ full-time industry team members across the 2,000+ person firm, over 5 years of operations. Our previous firm was the industry-leading firm providing services to the digital asset space, was recognized for its expertise, its innovative approach to transparency, and its dedication to quality services. We are proud of the 5 years of hard work that led to a globally recognized practice, the time that we donated to industry advocacy groups and the AICPA to better inform CPA practitioners and create additional guides and standards for the digital assets space.
After the failure of FTX and immense pressure (often resulting from inaccurate reporting), our previous employer determined that the best course of action for its firm and clients was to reduce attestation services in the digital asset space. Armanino was never engaged to perform financial statement audit services for FTX.com or Alameda, as discussed with media outlets in December 2022. Rather, Armanino served as financial statement auditor for FTX.US entity and a CFTC-regulated platform, LedgerPrime.
It is not The Network Firm’s place to make any additional comments related to Armanino’s engagements. We understand and respect our previous employer’s decision and have seen firsthand how good reputations of good actors can be impacted by the bad acts of others. Our hope is that all those affected by the totality of the FTX events are made whole, and as the facts and circumstances become clear to all, that the hindsight view will show that our former employer’s work adhered to standards.
Post FTX, and resulting contagion, was an inflection for many people, including our founding team members. Individuals on the team had dedicated years of hard work and participated in:
Creating the first-ever real-time attestation service in the world;
Completing the first-ever CPA-assisted Proof of Reserves attestation in the world;
Leading the development of Proof of Reserves guidance for industry practitioners, as part of the Digital Chamber’s Proof of Reserves working group and with Big 4 Audit firm participation;
Bringing the first off-chain reserves information on chain via an oracle network;
Assisting multiple AICPA working groups that produced guides for CPA practitioners in accounting for and auditing digital assets.
In sum, we believe our individual contributions meaningfully advanced trust and transparency for both the digital asset industry and the accounting profession. Today, we are convinced that there is continued room for improvement, and we are actively working to lead both the accounting and digital assets industries forward.
After this reflection, the founding members of The Network Firm realized that founding our own CPA firm focused on digital assets was the best way to achieve our shared mission.
The Network Firm LLP is a CPA firm, registered in Florida, USA with employees in Florida, other US states and abroad. The Network Firm is a newly established CPA firm, but benefits from decades of collective industry experience at the intersection of traditional accounting, attestation, and digital assets. The Network Firm is not a spinout or rebranding of Armanino, it is an independent firm, in which Armanino has no equity interest, and of which only one our seventeen founding team members was part of the FTX.US 2021 financial statement audit staff. Our firm was formed in January 2023, licensed shortly thereafter, and had our first true operational month in March of 2023. With 17 founding members, including business professionals, CPAs, and engineers, we have experience serving some of the largest names in the industry. We choose to work in the highest-risk areas of the attestation world. We pursue this work this because, even while firms today are hesitant to provide much needed services to the space, we feel a duty to the public and a passion to see the industry mature.
As an independent attestation provider, “our role in the marketplace as it related to attestation engagements, is to provide users of information, generally third parties, with an opinion, conclusion, or findings regarding the reliability of subject matter or an assertion about the subject matter, as measured against suitable and available criteria.” (SSAE No.18, P .07) Under our independence requirements, it would be improper for us at any time to make comments specific to any given client’s attestation reports, especially those that could be construed as advocating for a client. (Plain English Guide to AICPA Independence Rules)
In addition to our independence requirements, we are also limited in making public statements as we are bound by confidentiality commitments to clients, our professional standards and ethics requirements. We are independent, neutral, and limited in what we can say. With this in mind, we hope the public can understand, for TNF or any attestation provider, the opinion or finding is intended to be communicated solely through the attestation report, which should be clear and speak for itself.
So, with these professional obligations always in mind, we use our voice to (1) educate the public about the nuances and limitations of attestation reporting generally; (2) make all reporting as clear as possible; (3) provide explainers about our technology and how it works; and, (4) encourage intended users of attest reports to read them carefully. As a recent example of our efforts to educate, you can see our detailed explainer on Proof of Reserves for digital asset service providers. In the same vein, we will continue to produce educational materials about relevant changes in standards and best practices, as well as explainers on our own technology (LedgerLens™ Oracle Services, LedgerLens™ Real Time Reserves, and LedgerLens™ Pro).
As we founded The Network Firm, we expected legitimate questions about our story given the high visibility and tension in the past 8 months. Per the AICPA’s Code of Conduct, to which we adhere, members “commit themselves to honor the public trust. In return for the faith that the public reposes in them, members should seek to continually demonstrate their dedication to professional excellence.” Over time and consistent excellence, we look forward to building our reputation with the public through our “Proof of Work.”
Thank you,