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Doesn't anyone do due diligence anymore?


These days, it is hard to know what due diligence means – look at these recent investment failures into FTX

  • Ontario Teachers' Pension Plan, which put $95mn into FTX, insists that its professionals "conduct robust due diligence on all private investments".
  • Tiger Global tossed in $38mn and paid outside consultants, including Bain & Co, to do the work.
  • Sequoia Capital, handed FTX founder Sam Bankman-Fried $214mn even though he played video games during his pitch to them, has walked a fine line.

All the above missed what FTX's new chief has described as a "complete failure of corporate controls".

What would DD could have found in a review

Due Diligence Review Area

Pass / Fail

What Due Diligence Would Have Found

Officers and Principles


No track record (you could argue that no one has a track record here, but then everything else needs a careful review).

Organizational Structure


Conflicts exist between sister companies having the same ownership (Alameda was FTX's biggest client).

Compliance Structure


Certainly not enough with the right oversight.



Too many to count.



Client assets were moved to its sister firm.



FTT was basically an in-house cryptocurrency with no real market value.

Read the source articles here……


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