IRS wants $38 billion tax from Alameda
According to recent flings posted by the claims agent of bankrupt cryptocurrency exchange FTX, the U.S. Internal Revenue Service (IRS), is claiming a total of $44 billion from the exchange’s bankruptcy and related firms, including $38 billion against its sister quantitative trading firm Alameda Research. In one single claim, the IRS assessed $20.4 billion in unpaid partnership and payroll taxes against Alameda Research LLC.
Founded in Sept. 2017 by Sam Bankman-Fried and Tara Mac Aulay, with Caroline Ellison serving as CEO, Alameda was headquartered in Hong Kong and conducted up to $5 billion worth of trades per day at its peak. Hong Kong does not levy taxes on capital gains. However, being U.S. nationals, its founders and key executives are obligated to pay taxes on their worldwide income irrespective of where they reside and how many days they actually spend in the U.S. each year, as per the highly unusual U.S. taxation by citizenship regimen.
The partnership taxes assessed by the IRS suggests it believes the entity operated on a partnership regime, where, unlike corporations, profits are not taxed at the entity level but are instead “passed through” to its partners and subsequently taxed at the individual level.
If the IRS prevails, it could mean bad news for the creditors. According to the filing, the IRS is claiming the total unpaid taxes of $44 billion from FTX and related companies under Admin Priority. The IRS claims would take precedence over that of unsecured creditors, such as FTX’s one million users, during bankruptcy proceedings. Despite their best efforts, bankruptcy trustees and law firms have only managed to locate $7.3 billion in assets from FTX and related entities.A purported $20.4 billion IRS claim against Alameda Research circulating this week. (Twitter)
Milady NFTs and token frenzy
On May 8, seeing the traction surrounding meme tokens, a group of self-organized developers created the Milady (LADYS) token on Ethereum (ETH), basing their design on the popular anime nonfungible tokens (NFT) collection of the same name. The token has no association with Milady Mixer nor Charlotte Fang, the creators of the Milady collection.