FTX 2022: Rehypothecation Without Disclosure & Wrong-Way Risk | GP/LP Analysis — 3 Red Flags | EP08 T2

 The auditor had two people and an office in the metaverse. There was no CFO, no independent board, no segregation of client funds. John Ray — the lawyer who cleaned up Enron — said he had never seen a more complete failure of corporate controls. Every institutional due diligence standard would have found the gap in the first hour🔴 Every corporate failure leaves behind a pattern. FFL Risk Pattern Scan provides access to a searchable library of documented corporate collapses, frauds and restructurings that can be filtered by geography, sector, collapse mechanism and fraud vector. Compare live opportunities against historical cases using pattern matching and risk assessment tools designed for investors, lenders and deal teams. All analysis runs locally and remains private.⁠⁠⁠⁠⁠https://risk-pattern-scan.lovable.app/⁠⁠. This episode dissects the FTX rehypothecation mechanism, the wrong-way risk embedded in FTT collateral, and the three institutional due diligence failures that allowed $8 billion in client funds to disappear from the second largest crypto exchange in the world. GP/LP analysis. Crypto custody risk. Institutional due diligence. Exchange counterparty risk. Sequoia Capital wrote down five hundred million dollars in a single day. Not because the market moved. Because nobody had asked for an audited balance sheet from a thirty-two billion dollar company before wiring the money. This is the analysis of custody failure — how a custodian moves client assets into a proprietary trading operation, guarantees the resulting debt with collateral it manufactured itself, and builds a reputation so solid that asking for the documents feels like an insult. What a GP or LP requires from any custody counterparty before the first wire.Financial Forensics Labs — GP/LP Analysis. Every collapse has a pattern. We dissect it. Layer by layer.