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The US Treasury Department and the Internal Revenue Service (IRS) have filed 45 lawsuits worth $44 billion against bankrupt cryptocurrency exchange FTX and its subsidiaries.
In what appears to be a tax bill for FTX subsidiary Alameda Research LLC, which was circulated online on May 10, the IRS values the firm at $20.4 billion in partnership and payroll taxes. The score appears to be in line with the IRS statement posted on the website of Kroll Restructuring Administration, FTX’s claims agent.
Another $7.9 billion lawsuit is being filed by the IRS against Alameda Research LLC, and two lawsuits, $7.5 billion and $2.0 billion, are against Alameda Research Holdings. The IRS filed claims under administrative priority, which allowed its claims to replace those of lower level creditors during bankruptcy proceedings.
Although Alameda Research was headquartered in Hong Kong, its founders and key personnel, including Sam Bankman-Fried and Caroline Ellison, are US citizens. Unlike most other countries, the United States has a citizenship-based tax regime, meaning that US citizens are responsible for paying taxes on their worldwide income regardless of where they live or how much time they spend in the US. Every year. For partnership entities, taxes are not paid at the partnership level, but are passed through their partners and taxed at the individual level.
In April, it was reported that FTX had recovered $7.3 billion in assets and would consider restarting the exchange next year. The announcement was made before the IRS claims, and at the time, FTX’s liabilities still exceeded its assets by about $8.7 billion.
Cointelegraph reporter Turner Wright contributed to this story.