Animoca Brands’ Financial Report Delay: A Sign of Trouble or Valid Concern?

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Hong Kong-based blockchain gaming and Web3 investor, Animoca Brands, has been under scrutiny as it continues to delay publishing its 2020 audited financial report. The company received an extension until the end of Q1 2023 but has yet to meet this deadline, which has raised questions among stakeholders and sparked concerns within the industry.

Animoca Brands was established in 2014 and listed on the Australian Securities Exchange in January 2015. The company quickly built a reputation for launching massive game projects, but in 2020, it failed to publish its audited accounts as required. Despite obtaining approval from the Australian Securities and Investment Commission (ASIC) in 2022 to extend the filing deadline, Animoca still hasn’t produced the necessary documents.

The company’s chairman, Yat Siu, cites the market turbulence in 2021 and 2022 as the primary reason behind the delay. Siu explains that the firm’s private auditors, DFK International, want to incorporate the impact of their 2020 investments on subsequent years before releasing the final report. Essentially, the auditors are trying to provide a clear and accurate picture of the company’s financial position amidst rapidly changing market conditions.

Undoubtedly, the crypto market experienced significant fluctuations in 2021 and 2022. The industry witnessed a bullish run in 2021, characterized by high asset prices and the burgeoning NFT revolution. In contrast, 2022 saw a downturn in the market, with several top companies such as Terra, Three Arrows Capital, Celsius, and FTX encountering troubles. As Siu pointed out, these turbulent years were “lifetimes of an industry within a few months.”

For Animoca Brands, the market’s happenings have presented a unique challenge: the company made around 450 rounds of investments in Web3 projects, resulting in a portfolio filled with highly volatile tokens. Auditing these investments and reflecting their true impact on the company’s financial health is undoubtedly a challenging task.

While the reasons behind the delay may be understandable, one must consider the potential effects on Animoca Brands’ reputation and the industry as a whole. Stakeholders might perceive the extended delay as a sign of trouble, possibly eroding confidence in the firm’s leadership and business model.

In conclusion, although the market turbulence in 2021 and 2022 presents valid justifications for Animoca Brands’ financial report delays, it’s crucial for the company to prioritize transparency and fulfill its obligations to stakeholders. Maintaining accountability and integrity is paramount for any firm in the blockchain gaming and Web3investment space, and addressing these concerns promptly will play a significant role in building trust within the community.

Source: Cryptonews

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