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Chris Addy By Chris Addy FCA CFA, Founder and CEO, Castle Hall Diligence:

Sam Bankman-Fried convicted on all counts - plenty to digest.

First, FTX strongly suggests that crypto - while a highly interesting concept and technology - is not yet ready for institutional investment.

Second, FTX raises profound questions around the venture capital investment model. For VC asset managers accepting institutional, pension capital - assets owned by tens (or hundreds) of thousands of end pension beneficiaries - a minimum standard of operational capability must be required before investing in target companies, even for early stage start ups.

In this case, FTX had an utterly deficient corporate infrastructure, including a lack of governance, a lack of a reputable audit, an entirely under qualified back office.

As VC learns from this example, what are the absolute minimums for any portfolio company investment?

• A capable finance function headed by a suitably experienced CFO
• Adequate accounting systems to ensure accurate recording of corporate transactions
• Clear segregation of duties to ensure that enigmatic 'founders' cannot over-ride core operational and business controls
• Effective controls around treasury and cash management
• Robust cyber security controls

As a wise person recently said, "FOMO" is not an investment strategy.