Here is official email receiived among the payment:
Wire Amount: $xxxx.xx
Percent of this amount that is interest: 25.14%
Claim Number: xxxxx
Website: poloniexfairfund.com
Dear xxx xxx
KCC Class Action Services (“KCC”) was appointed by the U.S. Securities and Exchange Commission (the “Commission”) to serve as Fund Administrator of the Fair Fund established in the Administrative Proceeding File no. 3-20454 (the “Poloniex Fair Fund”). In the Order issued in the Administrative Proceeding (the “Order”), the Commission found that Poloniex operated a digital asset trading platform that meets the definition of an “exchange” under the federal securities laws but did not register as a national securities exchange nor operate pursuant to an exemption from registration at any time, in violation of Section 5 of the Securities Exchange Act of 1934. The Poloniex Fair Fund consists of disgorgement, pre-judgment interest, and civil money penalty paid by Poloniex, LLC pursuant to the Order aggregating to $10,388,309.10, plus earnings thereon. On January 31, 2023, the Commission approved a plan for the distribution of the Poloniex Fair Fund (the “Plan”); you can learn more about, and download copies of, the Order and the Plan at poloniexfairfund.com.
This email serves as your Notice of Distribution regarding your submission to the Poloniex Fair Fund. Distribution Payments will be released via wire transfer on a rolling basis between January 8 – 14, 2025, to the bank account we have on file. However, it may take time for your bank to process and credit the payment to your account. If you have not received the Distribution Payment by January 28, 2025, please contact us to inquire about the status of your payment.
This distribution has been calculated pursuant to the Plan. The Fund Administrator is distributing the Poloniex Fair Fund to Payees who paid fees to transact in certain Crypto Assets on the Poloniex trading platform between August 1, 2017 through November 30, 2019, inclusive. Since the Net Available Fair Fund exceeds the amount necessary to compensate all Eligible Claimants for their Recognized Losses, reasonable interest has been added to the Distribution Payment to compensate for the time value of each Eligible Claimant’s respective Recognized Losses. This interest was calculated according to Exhibit A (Plan of Allocation) of the Plan.
The Tax Statement at Appendix A below is for informational purposes only. The tax treatment of the distribution is the responsibility of the Payee; please consult your tax advisor to determine the tax implications of this Distribution Payment.
Please note, any rejected or returned wires must be reissued within 120 days of the original payment date. If your payment instructions have changed and you did not receive the wire sent to you, you must inform us on or before May 7, 2025 by emailing us at
[email protected].
The Distribution Payment is solely for the benefit of the Payee (as defined in the Plan), and the Commission retains jurisdiction over these funds and their distribution. Only the Payee is authorized to receive the wire payment; payment instructions cannot be provided for another person’s account.
If you have any questions, please direct these to Fund Administrator, KCC, at
[email protected].
Very truly yours,
KCC – Fund Administrator
Website: poloniexfairfund.com
Appendix A: Tax Statement
The wire payment represents a Distribution Payment from Poloniex Fair Fund established by the U.S. Securities and Exchange Commission (the “Commission”) in Poloniex, LLC, (“Poloniex”) Administrative Proceeding File no. 3-20454 (Aug. 9, 2021). The Distribution Payment was calculated pursuant to the Plan of Distribution approved by the Commission. Please promptly verify receipt of the wire payment. If your wire was rejected, you will forfeit your Distribution Payment if updated payment instructions are not received by May 7, 2025.
The Fair Fund is a “Qualified Settlement Fund” (“QSF”) as defined in Section 468B(g) of the Internal Revenue Code, 26 U.S.C. Section 468B(g), as amended, and U.S. Treas. Reg. Sec. 1.468B-1 et seq. The distribution is intended to compensate you for losses incurred with respect to your investment with the Respondent, as a result of the conduct described in the Commission’s Administrative Proceedings. The Commission approved a distribution plan that contains an allocable share of interest. Each of these components (hereinafter, “Losses” and “Interest”) has different tax consequences, discussed below.
Losses. Generally, the Losses component of the distribution is not income to you to the extent of your basis in your investment. However, you must reduce your basis by the amount of the Losses component. If the Losses component of the distribution exceeds your tax basis in your investment, then the excess is includable in your income as capital gain. Any such capital gain is long-term capital gain unless you disposed of your investment before holding it for longer than one year. If you do not have reasonable access to records indicating the tax basis of your investment, then you may assume that your tax basis is zero and that the entire Losses component of the distribution is includable in your income as capital gain. The QSF is not required to – and will not – issue a Form 1099 to you with respect to the Losses component of the distribution.
Interest Component. The interest component – which comprises 25.14% of the distribution to you– constitutes taxable interest income to you; however, you will only receive a Form 1099-INT if the distribution contains $600 or more of such interest. Under certain circumstances, the interest component may have been subject to 24% backup withholding (as well as state withholding, as applicable). To the extent that the interest component is subject to such withholding, it will be reflected on the Form 1099-INT that will be issued to you (as well as any related state forms, as applicable). If you are, or are presumed to be, a nonresident alien of the U.S. (“NRA”), or a payee subject to withholding under the Foreign Account Tax Compliance Act (“FATCA”), you may receive Form 1042-S with respect to the interest component of the distribution. The interest component may also have been subject to 30% NRA withholding or 30% FATCA withholding under certain circumstances, which has been remitted to the IRS on your behalf (if applicable). To the extent the interest component is subject to such withholding, it will be reflected on the Form 1042-S that will be issued to you in the first quarter of the year subsequent to the year you receive a distribution payment.
IRA, QRP, or Other Tax Deferred Vehicle. If you held your investment(s) in an individual retirement account (“IRA”), qualified retirement plan (“QRP”), or other tax deferred vehicle, the wire has, or should have, been directed to the trustee or custodian of your IRA or QRP. If you have mistakenly directed this payment to an account that is not an IRA or QRP, please contact the IRA/QRP custodian. Caution: If the wire is sent to any account other than an account eligible to receive it, it may be subject to income tax and a 10% penalty.
Please note that the Commission, the Fund Administrator, and the Tax Administrator cannot provide tax advice to Payees. The information contained herein is being provided for informational purposes only to assist you in determining the United States (“U.S.”) federal income tax consequences of the Distribution Payment if you are a citizen or resident of the U.S. The tax consequences of the Distribution Payment may vary depending on your individual circumstances. Except as provided above, the information provided herein may not be applicable if you are a nonresident alien of the U.S. or a FATCA-subject payee and it does not address the alternative minimum tax provisions of federal tax law, state, local and non-U.S. tax rules, or the effect of possible changes in laws. THE INFORMATION CONTAINED HEREIN IS NOT AND SHOULD NOT BE RELIED UPON AS TAX ADVICE. CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE DISTRIBUTION PAYMENT TO YOU.