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September 25, 2023

Armanino’s Former Crypto Team Has Left and Formed Their Own Shop, Allegedly

black and white person walking away alone

Having happily offered services to crypto clients since 2014, Armanino very nearly marked ten years in the crypto space until the catastrophic collapse of crypto exchange FTX in November 2022 forced them to part ways with crypto clients seeking assurance, FTX being one of them. As a reminder, here’s what happened in December:

Armanino is ending its crypto audit practice and dropping clients, two sources familiar with the matter say.

The unit may be folding under pressure from Armanino’s non-crypto clients, concerned that reputational risk to the firm will throw their audits into question, according to a source with knowledge of the firm’s crypto offerings. Last month, Armanino was named in a class-action lawsuit for failing to catch irregularities at FTX.US after performing the exchange’s audit last year. The suit was filed by Stephen Pierce, an FTX customer who allegedly lost $20,000.

CoinDesk is now reporting that Armanino’s crypto team — including its leader — have struck out on their own and plan to offer a suite of services to crypto clients who haven’t been able to get these services from their former employer.

Members of the accounting firm Armanino’s digital-asset practice have departed and formed a new startup – The Network Firm – to carry on the business of providing audits, attestations and related work for crypto clients.

The move, confirmed to CoinDesk this week by people with knowledge of the matter, came after Armanino late last year decided to stop performing crypto audits, amid heightened scrutiny of its past work for a U.S. affiliate of Sam Bankman-Fried’s FTX exchange. Armanino has said it stands by its 2020 and 2021 audits of FTX US.

The official separation of the digital-asset team, led by Noah Buxton, took effect on Wednesday, the people said. According to the company’s LinkedIn page, The Network Firm was founded this year and is based in Miami.

The Network Firm website lists the following folks as the team (“CBP” = “Certified Bitcoin Professional,” a certificate issued by the CryptoCurrency Certification Consortium):

Noah Buxton
Co-Founder & CEO

Jeremy Nau
Co-Founder & COO

Clayton Lowery
Co-Founder &
Chief Strategy Officer

Nick Ward
Co-Founder & Assurance Director

Ilya Okhotnikov
Lead Engineer

Wesley Barton
Manager, Digital Asset
Business Services

Thomas Ma
Supervising Senior Associate, Assurance

Jesse Fink
Manager, Assurance

Snapshot of The Network Firm website as of March 2023

Noah Buxton is (was?) partner and leader of Armanino’s Blockchain & Digital Assets practice and contributing writer and member of the AICPA Blockchain for SOC Working Group. He is still listed on Armanino’s site and there he is asked “What was it that drew you to Armanino?” His answer:

I was drawn to Armanino because it values the entrepreneurial spirit that I was searching for. When I came here in 2016, it was to build a risk assurance and advisory function, and it really resonated with me that you could build a business within a business here. We started with one staff member and a couple gifted clients, and it grew into the large department that it is today. Armanino’s platform for innovation and growth allowed my career to flourish in ways I never could have imagined.

It makes sense then that he would forge a different path now that Armanino has pulled back on all that innovation.

Former Accounting Team of FTX US Auditor Armanino Sets Up Shop as The Network Firm [CoinDesk]

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