IRS has filed 45 Claims worth $44B from FTX Bankruptcy
- The US Department of Treasury and the IRS have filed a total of 45 claims worth $44 billion against crypto exchange FTX.
- The firm owes around $20.4 billion in partnership and payroll taxes, with an additional claim of $7.9 billion against Alameda Research.
- Two separate claims of $7.5 billion and $2.0 billion have also been filed against Alameda Research Holdings.
- It is important to note that Alameda Research is liable to pay taxes, although it is headquartered in Hong Kong.
- FTX plans to restart operations with $7.3 billion in assets.
The bankruptcy of crypto exchange FTX affected the entire crypto market, with multiple crypto companies losing their money, which was tied to the firm led by Sam Bankman-Fried, also known as SBF in the crypto space. Interestingly, as per recent developments, the United States Department of Treasury and Internal Revenue Service (IRS) have filed a total of 45 claims worth around $44 billion against the bankrupt cryptocurrency exchange and the companies related to it, including trading firm Alameda Research.
According to a picture of a document that seems to be the official tax bill for the bankrupt crypto exchange’s sister company, Alameda Research LLC, and has been circulating online since May 10, the firm owes around $20.4 billion in partnership and payroll taxes. While the major balances don’t have much detail, “it appears the IRS went back and reclassified all employees from contractors to employees and hit them for unpaid employer-side employment taxes.”
It is also crucial to note that this picture of the document matches the IRS claim found on the website of Kroll’s Restructuring Administration practice. Moreover, an additional claim of $7.9 billion was made by the revenue service for the US federal government against Alameda Research LLC, followed by two separate claims of $7.5 billion and $2.0 billion against Alameda Research Holdings.
Additionally, the IRS filed the claims under “administrative priority,” which means that the agency’s claims supersede those of unsecured creditors who have been waiting to claw back their money via bankruptcy proceedings. It is important to note that Alameda Research is liable to pay taxes, although it is headquartered in Hong Kong.
This is because the United States follows a taxation-by-citizenship regime, which basically means that the citizens of the country are liable to pay taxes on their worldwide income irrespective of the place where they reside or do their work. The faces of the trading firm, Sam Bankman-Fried and Caroline Ellison, are both citizens of the US.
The taxes do not depend on how much time the citizens have in the country, and when it comes to partnership entities, taxes are not paid at the partnership level but are passed through the individuals in the partnership, and each individual has to pay their due to the IRS.
According to recent reports, FTX recently sold its subsidiary LedgerX, a popular futures and options exchange and clearinghouse, to an affiliate of Miami International Holdings (MIAX), M7 Holdings, for a price tag of $50 million. The creditors aim to sell the company’s assets and subsidiaries in an attempt to get their initial investment back.
As earlier reported by BitcoinWisdom, the crypto exchange failed due to price, greed, and incompetence, said the current CEO and Chief Restructuring Officer, John Ray III. He added that the firm lacked fundamental accounting and financial controls and was run by a small group of people who “stifle dissent.” He noted that the debtors “have had to overcome unusual obstacles due to the FTX Group’s lack of appropriate record keeping and controls in critical areas.”
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
