Key takeaways:
- Against Alameda Research, it is alleged that $20.4 billion in unpaid partnership and income taxes have been assessed.
- The IRS has also filed a $7.9 billion claim against Alameda Research LLC and two claims totaling $7.5 billion and $2.0 billion against Alameda Research Holdings.
The insolvent cryptocurrency exchange FTX and its subsidiaries are the subjects of 45 lawsuits worth $44 billion from the US Department of Treasury and Internal Revenue Service (IRS).
The IRS asserted 45 claims against FTX companies, including Ledger Holdings (the parent company of LedgerX and LedgerPrime), Blockfolio, and West Realm Shires, according to bankruptcy filings made on April 27 and 28. West Realm Shires is the legal entity behind FTX.US.
The IRS estimated the company owed $20.4 billion in partnership and payroll taxes, which seems to be a tax invoice for FTX’s sister company Alameda Research LLC that went viral online on May 10. The evaluation reportedly matches the IRS claim discovered on the website of Kroll’s Restructuring Administration practice, which is the claims representative for FTX.
The IRS has also filed a $7.9 billion claim against Alameda Research LLC and two claims totaling $7.5 billion and $2.0 billion against Alameda Research Holdings. The IRS filed the claims under “administrative priority,” which allowed its claims to take precedence over those of unsecured creditors throughout the bankruptcy process.
Despite having its headquarters in Hong Kong, Alameda Research’s founders and key employees, such as Sam Bankman-Fried and Caroline Ellison, are Americans. The United States employs a taxation-by-citizenship system, which means that citizens are responsible for paying taxes on their global income regardless of where they live or how much time they spend there annually.
Taxes for partnership entities aren’t paid at the partnership level; instead, they are transferred through their participants and are subject to individual taxation.
The FTX recovered $7.3 billion in assets in April and plans to restart the exchange next year. FTX’s liabilities still outweighed its assets by an estimated $8.7 billion at the time of the announcement, before the IRS’ claims were filed.
Last week, the US Bankruptcy Court for the District of Delaware granted LedgerX’s sale to M7 Holdings, a division of Miami International Holdings, in response to FTX debtors’ request in April. According to FTX’s estimate at the time of the acquisition agreement, the transaction would generate close to $50 million in proceeds.
