IRS Claims $44 Billion From FTX and Related Companies, Including $38 Billion Against Alameda Research

IRS Claims $44 Billion From FTX and Related Companies, Including $38 Billion Against Alameda Research

Bankrupt cryptocurrency exchange FTX’s claims agent has recently posted that the US Internal Revenue Service (IRS) is claiming a total of $44 billion from the exchange’s bankruptcy and related firms. The IRS is claiming $38 billion against its sister quantitative trading firm Alameda Research. The IRS assessed $20.4 billion in unpaid partnership and payroll taxes against Alameda Research LLC in one single claim. Alameda Research was founded in September 2017 by Sam Bankman-Fried and Tara Mac Aulay, with Caroline Ellison serving as CEO, and it was headquartered in Hong Kong. Despite Hong Kong not levying taxes on capital gains, 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 US each year.

The partnership taxes assessed by the IRS suggest that the entity operated on a partnership regime, where profits are not taxed at the entity level but are instead “passed through” to its partners and subsequently taxed at the individual level. The IRS is claiming the total unpaid taxes of $44 billion from FTX and related companies under Admin Priority. The total unpaid taxes 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.

The Rise of Milady Token

On May 8, 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. Developers have stated that “94% of the tokens were sent to the liquidity pool (LP). LP tokens were burnt, and the contract is renounced,” while the remaining 1% airdropped to Milady NFT holders and 5% reserved in multisig wallets for future milestones. In addition, developers warned: “$LADYS is a meme coin with no intrinsic value or expectation of financial return. There is no formal team or roadmap. The coin is completely useless and for entertainment purposes only.”

However, investors seem to think otherwise. At the time of publication, each LADYS token is worth $0.0000001285 apiece, an increase of 3,254% in one day’s time. On May 10, Elon Musk tweeted a meme containing the image of a Milady NFT, causing the collection’s average sale price to spike. On May 11, Asia-Pacific focused exchanges such as Bybit, Bitget, MEXC Global, and Huobi all began listing the meme token. At the time of publication, LADYS’ market cap has surpassed $100 million, with $245 million in volume traded within the past 24 hours.

Do Kwon’s Legal Troubles

Terraform Labs’ co-founder Do Kwon faces extradition on fraud charges from both South Korean and US prosecutors related to the collapse of Terra Luna. His actions have upset many people, and on May 10, South Korea Chief Judge Yun Chan-Young froze 233.3 billion Korean won ($176 million) worth of Kwon’s personal assets. The prohibition extends to the sales of Do Kwon’s Galleria Foret apartment complex in Seoul, a novel officetel, and a series of imported cars. The order also bans the disposition of Kwon’s financial assets, such as securities, bank deposits, and cryptocurrency stored in personal accounts on virtual currency exchanges. Multiple criminal proceedings across jurisdictions against Kwon are currently ongoing. Meanwhile, his attorneys have proposed he be let out on bail at 400,000 Euros or $437,000, which the court is yet to decide on.


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