I sincerely hope that I never meet Sam Bankman Fried, because if I did I do not know what I would do but it certainly wouldn't be legal.<p>I was stupid and thought that the 7+% interest I was getting from Gemini+GUSD+Genesis Holdings was a good idea, I put a good chunk of money in there, and as of right now the status for that appears to be in "limbo at best". It's particularly upsetting, because this all unfolded right after I got fired from my last job, when I really needed my liquid money to pay for things like "my mortgage" and "food".<p>I'm fine now fiscally, and even wasn't in too much trouble back in November [1], but it make me lose multiple nights of sleep worrying about stuff, and also made me feel like an idiot for ever thinking that cryptocurrency was a good idea.<p>[1] I have a good chunk of money stashed in stocks/ETFs, which I could have liquidated for money, but the market was pretty far down so I would have had to take a big haircut.
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.<p>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.<p>Edit:<p>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<p><a href="https://www.cnbc.com/2022/08/20/ftx-grew-revenue-1000percent-during-the-crypto-craze-leaked-financials.html" rel="nofollow">https://www.cnbc.com/2022/08/20/ftx-grew-revenue-1000percent...</a>
The FTX bankruptcy will now probably be converted to a straight liquidation. The current management has the fantasy that they can emerge from Chapter 11 reorganization as a going concern. Not likely. There's no ongoing business worth continuing.
As much as I dislike FTX/Sam, there's no way this is correct. What the IRS is probably doing is naming the highest number they can think of in hopes of increasing the percent of liquidated holdings they get once this goes through bankruptcy, which is particularly scummy considering they're just taking the money from people who actually deserve it.
The IRS has been signaling hard the past few years -- to all employers, big and small -- that the "contractor" category only works if you meet a bunch of tests. Anyone with a Gusto account, or a working HR department, knows this.<p>From a social-equity standpoint, I'd rather see FTX depositors get some cash, instead of having the IRS book the biggest recoveries. But in terms of what the law is, if we're looking at total FTX contempt for the right way to classify people on its payroll, it's hard to argue against the IRS coming down hard on this one.
So IRS is asking FTX to pay millions of dollars in unpaid payroll taxes as result of classifying FTX workers from contractors to employees. Will IRS refund said workers the payroll taxes workers paid as part of their Schedule-C? (Contractors pay their own payroll taxes when they file Schedule-C; companies pay payroll taxes for their employees, but not for their contractors)
"This suggests that the department reclassified all of FTX’s contractors to full-time employees in order to arrive at such a large tax payroll-related tax claim."<p>Genius. Why not, free money. Unless of course you don't think government agencies should play fast and loose with their enforcement based on the likelihood of the defending party to successfully resist.
Fun fact, the Kroll organization who's hosting the bankruptcy docs / helping manage the process is the successor org founded by Nick Kroll's father (from The League). He sold it and started several new ventures with similar names.<p><a href="https://time.com/6095957/jules-kroll-private-detective-profile/" rel="nofollow">https://time.com/6095957/jules-kroll-private-detective-profi...</a>
This is f** wild. I don't understand level of incompetence it took to trust him with that much money. People who trusted them with this much money are fools. Fools with large $$$.
I'm not american, but sometimes I wonder if those things happen because a smart evil person manages to convince another negligent and unintelligent person to do a bad thing and take responsibility for it.<p>I mean I don't think we need full communism to prevent and solve this kind of crazy finance thing, but it's really weird how americans will often fight against common sense regarding finance, safety and risks.<p>There are days I want to believe capitalism can be "reformed" and made better, but other days, I tend to think finance should be managed and tightly controlled by the government to limit the level of damage foul play can do. And yet I can already hear armchair economist answering me about the invisible hand, the collective intelligence of the free market, decentralized decision making, etc.<p>It is really weird how currency and economics have been hijacked by politics. Such a weird phenomenon.
All we can hope for is that the entire policule is crucified. These financial criminals keep getting away with stealing absurd sums and we need examples to be made.
To all the idiots who lost money with SBF - please stop blaming SBF.<p>Even if ya'll will be given all your money back - you'd still manage to lose it again in a short time and blame someone else. SBF has nothing to do with it.<p>Your mindset and you do.
People on HN have been calling BS on crypto for as long as crypto has been a thing. Crypto has not provided any value to society — besides giving people a false sense of security when buying drugs — but somehow it is a multi billion dollar market. The fundamentals never checked out and crypto has never been more than a curiosity for academics and tech geeks.<p>I’m no Michael Bury but it was pretty obvious this was eventually going to fail, the unknown was when. The whole system was so rotten you could not short crypto without exposing yourself to the same systematic risks which would cause the eventual collapse. Maybe your shorts were right, but good luck getting any money out after the whole thing implodes.<p>People will continue to get scammed for the rest of eternity so I think the best thing we can do is set up strong safety nets and welfare for those who lose their life savings. Regulation does help, but scammers will always find new ways.