Thanks for getting around to posting this @andy-parafi. I think this is an interesting case study as the first example of a completed NP audit from the pilot programme. Please know that my following comments are intended to help ensure the IC establishes sufficiently robust processes for ‘deterministic decentralisation’, and are not about criticising you or the auditor.
I can’t help questioning the integrity of this audit and the process surrounding it, for several reasons.
This is in contrast with what the auditor wrote up in her work.
Maria Fedak, Auditor at JayBee
According to the documentation provided, including the shareholder structure and interview with the company’s controlling member and Partner, it has been established that ParaFi Technologies NS LLC is wholly owned by ParaFi Technologies LLC.Furthermore, no ownership or controlling relationship has been identified between Rivonia Holdings LLC or 9Yards Capital and ParaFi Technologies LLC or ParaFi Technologies NS LLC.
The depth of the auditor’s review appears to be limited to whatever information they were supplied by the NP. Given this, I find myself asking what audits of this sort are actually achieving.
At the company’s request, the exact ownership percentages will not be disclosed
For arguments sake, how can the community have confidence that 9 Yards has <1% ownership. It grew from 0% after the community pushed back on the original information presented (the auditor doesn’t appear to have done this). It’s not clear that it wouldn’t grow again with a thorough audit.
I’m not saying I expect that to be the case. But I am expressing concerns that I think there is still something lacking in this process. If this same process were applied to a well organised bad actor, would this process be robust enough to keep the IC safe?