The fraud and failure of FTX is a story of unethical leadership, inadequate governance and organizational culture with low psychological safety. As with many frauds, the primary media focus is on the sensational details. In this case, the spectacular rise and downfall of the wunderkind entrepreneur Sam Bankman-Fried combined with the industry in which the fraud occurred: cryptocurrency.

But hidden beneath the surface of the enigmatic leader and the FOMO (fear of missing out) inherent in cryptocurrency are critical lessons in ethical decision-making, governance and organizational culture.

In this seminar, we will explore the FTX fraud and critical stakeholders using IESBA’s (International Ethics Standards Board for Accountants) five fundamental principles of ethics as the framework for our investigation:

• Integrity
• Objectivity
• Professional competence and due care
• Confidentiality
• Professional Behaviour

We will examine how a lack of psychological safety and a toxic organizational culture compromised the ethical decision-making process of numerous stakeholders.

We also examine the underlying technology at the heart of cryptocurrency, Blockchain, and why our professional judgement is most vulnerable with transformational technologies.

By the end of this course, participants should be able to:

• Define IESBA’s five fundamental principles of ethics.
• Summarize the key events and dates of the FTX fraud.
• Identify the key stakeholders of FTX.
• Illustrate what when wrong with FTX using each of the five fundamental principles of ethics.
• Explain how low psychological safety and a toxic organizational culture contributed to the fraud and poor ethical decision making.
• Define Blockchain and cryptocurrency.
• List one reason why blockchain technology was created.
• Discuss why transformational technologies hinder our professional judgement and ethical decision making.