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FTX probably did have unpaid taxes, but could they have gotten to a $44B dollar unpaid bill? That implies revenue or payroll of order-of-magnitude $200B. I don'

FTX probably did have unpaid taxes, but could they have gotten to a $44B dollar unpaid bill? That implies revenue or payroll of order-of-magnitude $200B. I don't know FTX's finances but that seems extreme, even for them. The article also only mentions what half the bill is. $20.4B of partnership taxes and unpaid payroll, but no info on the other $23.6B of taxes. Edit: From a random googled article: $1.02B of revenue in 2021. It seems like a long jump from that to a $44b tax bill - even if they had perfect accounting they would never have been able to pay that much https://www.cnbc.com/2022/08/20/ftx-grew-revenue-1000percent-during-the-crypto-craze-leaked-financials.html https://www.cnbc.com/2022/08/20/ftx-grew-revenue-1000percent...

robinson7d 3y ago
Article says “ According to bankruptcy filings on April 27 and 28, the IRS filed claims worth nearly $44 billion against the firms, including FTX.US and Alameda Research.” Clicking through to the list of filings shows about 1850 items (rounded, 93 pages of 20 filings each), many of which don’t appear to be against FTX. For example there’s a $2.5 billion one on the first page against “Paper Bird Inc”, who I haven’t looked up yet.
- robinson7d 3y ago
  Welp, guess I picked a bad one. Paper Bird Inc seems to be owned by Sam Bankman-Fried… but anyway maybe they aren’t all owned by him, and regardless it might partially explain why the revenue numbers GP was looking up are much lower than the claims.
  - dpflan 3y ago
    Amazing find, a list of each entity and owner would be great to see considering you chose a random company and yet it was within the SBF sphere of influence. What was the end game for FTX? Funneling money to its own shell companies to achieve…
    - chrisco255 3y ago
      The end game was to secure a regulatory monopoly for FTX. SBF was beloved in Washington circles, even the SEC Chair had exclusive meetings with him. It's also well known he spent enormous amounts of money on the elections: From Oct 19, 2022, just before their collapse: https://www.ftxpolicy.com/posts/possible-digital-asset-industry-standards https://www.ftxpolicy.com/posts/possible-digital-asset-indus...
      - dpflan 3y ago
        Thanks for the link. A monopoly for FTX would mean what given how they managed themselves? Excessive money into opaque entities owned by FTX, I guess.
        pas 3y ago
        It was not a coherent strategy. They basically put the whole industry on a trajectory that was unsustainable, and hoped that there's at least one more price increase/jump, that'll 10x their value, because in that case that means everyone is using crypto, there's no "backing off", etc.
        dpflan 3y ago
        Indeed, it seemed on the verge of collapse once the curtain was pulled back. I can’t see how a regulation monopoly would have done anything more than make its implosion that much bigger and influence more of economic and political structure as more entities would have become intertwined, pulled by the gravity of greed.
meltedcapacitor 3y ago
It is sure an upper estimate but the order of magnitude is maybe not off: That revenue is probably mostly fees from the exchanges. Alameda as a partnership started with peanuts and was at some point (say 2021 fiscal year) was worth like 80b or whatever out of trading and made up coins whose cost is petty expenses on a web page and a few dev days, so an aggressive interpretation is that 80B minus 10 million whatever is capital gains, that passes through Alameda partners as personal income. Of course they burnt it all the next year so there might be an equally big tax credit for fiscal year 2022, to be used against future profit/income lol. Also, FTX had no concept or accounting of client assets, so for tax purposes it might be considered that all the money clients "deposited" was revenue, which is how SBF functionally treated it.

robinson7d 3y ago

Article says “ According to bankruptcy filings on April 27 and 28, the IRS filed claims worth nearly $44 billion against the firms, including FTX.US and Alameda Research.” Clicking through to the list of filings shows about 1850 items (rounded, 93 pages of 20 filings each), many of which don’t appear to be against FTX. For example there’s a $2.5 billion one on the first page against “Paper Bird Inc”, who I haven’t looked up yet.

robinson7d 3y ago
Welp, guess I picked a bad one. Paper Bird Inc seems to be owned by Sam Bankman-Fried… but anyway maybe they aren’t all owned by him, and regardless it might partially explain why the revenue numbers GP was looking up are much lower than the claims.
- dpflan 3y ago
  Amazing find, a list of each entity and owner would be great to see considering you chose a random company and yet it was within the SBF sphere of influence. What was the end game for FTX? Funneling money to its own shell companies to achieve…
  - chrisco255 3y ago
    The end game was to secure a regulatory monopoly for FTX. SBF was beloved in Washington circles, even the SEC Chair had exclusive meetings with him. It's also well known he spent enormous amounts of money on the elections: From Oct 19, 2022, just before their collapse: https://www.ftxpolicy.com/posts/possible-digital-asset-industry-standards https://www.ftxpolicy.com/posts/possible-digital-asset-indus...
    - dpflan 3y ago
      Thanks for the link. A monopoly for FTX would mean what given how they managed themselves? Excessive money into opaque entities owned by FTX, I guess.
      - pas 3y ago
        It was not a coherent strategy. They basically put the whole industry on a trajectory that was unsustainable, and hoped that there's at least one more price increase/jump, that'll 10x their value, because in that case that means everyone is using crypto, there's no "backing off", etc.
        dpflan 3y ago
        Indeed, it seemed on the verge of collapse once the curtain was pulled back. I can’t see how a regulation monopoly would have done anything more than make its implosion that much bigger and influence more of economic and political structure as more entities would have become intertwined, pulled by the gravity of greed.

meltedcapacitor 3y ago

It is sure an upper estimate but the order of magnitude is maybe not off: That revenue is probably mostly fees from the exchanges. Alameda as a partnership started with peanuts and was at some point (say 2021 fiscal year) was worth like 80b or whatever out of trading and made up coins whose cost is petty expenses on a web page and a few dev days, so an aggressive interpretation is that 80B minus 10 million whatever is capital gains, that passes through Alameda partners as personal income. Of course they burnt it all the next year so there might be an equally big tax credit for fiscal year 2022, to be used against future profit/income lol. Also, FTX had no concept or accounting of client assets, so for tax purposes it might be considered that all the money clients "deposited" was revenue, which is how SBF functionally treated it.