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Adjudicated2025-04-15EthereumLast verified 2026-09-22

Saitama SAITAMA

Status and tax treatment for holders of a dead token. Facts only, sourced below.

30-second answer

Saitama is the token at the center of a 2024 DOJ and SEC case. Two Saitama employees pleaded guilty, and in April 2025 the court entered consent judgments against both in the SEC case. Three other people are charged, which is an allegation, not a finding. For a US filer the case creates no loss by itself. A loss needs a closed transaction, and a sale is the route the record supports.

What the record shows

On October 9, 2024 the Department of Justice unsealed charges against the leadership of Saitama [1]. Two Saitama employees had already pleaded guilty to market manipulation and conspiracy, one on May 23, 2023 and one on January 30, 2024 [10] [11]. A third defendant was arrested in the United Kingdom two days before the charges were unsealed. At its peak the company boasted a market value of $7.5 billion, according to the charging documents [1].

The SEC filed a civil complaint the same day and published it as Litigation Release No. 26155 on October 15, 2024 [2]. The complaint alleges false statements about the Saitama ecosystem, secret selling by insiders, and paid wash trading. Those are allegations. The pleas are not.

On April 15, 2025 the court in the SEC case entered consent judgments against the two employees who had pleaded guilty [9]. Ten days later it stayed the case against the others while the criminal case runs, and the SEC filed an amended complaint on September 3, 2026 [9].

What the chain shows

Saitama has two contracts on Ethereum. The V1 contract is marked migrated on the block explorer, and its page points at the V2 address [3]. The V2 contract carries a migration notice of its own: the token migrated and rebranded to SaitaChain [4]. Neither page states the migration ratio, so that fact is not verified here.

Tax treatment

The charges do not create a loss. A loss needs a closed transaction. The IRS Chief Counsel memo on crypto that has crashed says a token that still trades on an exchange is not worthless, and a holder who still controls it has not abandoned it [5]. The memo reads a worthlessness loss for an individual as a miscellaneous itemized deduction, and the statute now allows none of those for any tax year after 2017, with no end date [8].

Selling is different. The IRS FAQ says a sale of virtual currency for real currency is a capital gain or loss, reported on Form 8949 and summarized on Schedule D [6]. Whether the V1 to V2 migration is itself a taxable exchange is a question this site has not checked against a primary source. So the tax route on this page reads sale for zero: the worthless route is closed to an individual by statute, the migration route is unchecked, and a sale is the one route that rests only on facts this page has verified.

What a holder can do

The recover-or-write-off table further down lists three things a holder can do with what is left. None of them is a recommendation. Each one produces a different receipt, and the IRS reads the receipt.

Key facts

Key facts
Status
Adjudicated
Status date
2025-04-15 · 2026-09-22
Token
Saitama (SAITAMA)
Chain
Ethereum
Contract
0xce3f08e664693ca792cace4af1364d5e220827b2 · 2026-09-01
Prior contract
0x8b3192f5eebd8579568a2ed41e6feb402f93f73f · 2026-09-01
Recoverability
Partial · 2026-09-01

Recovery

  • The first contract is marked migrated to the successor contract; the explorer states no ratio and no deadline · 2026-09-01
  • The successor contract is marked migrated and rebranded to SaitaChain; the explorer states no ratio and no deadline · 2026-09-01
Tax route
Sale for zero · 2026-09-01

Since January 1, 2025 basis is tracked wallet by wallet, and Rev. Proc. 2024-28 gave a safe harbor for sorting old basis into the wallets that held the tokens.

Source: Internal Revenue Bulletin 2024-31, carrying Rev. Proc. 2024-28, https://www.irs.gov/irb/2024-31_irb

How the loss gets booked: the worthless-token guideHow the basis gets rebuilt: the cost-basis guide

Evidence

Sources for this entry are listed below.

Sources and on-chain refs
  • U.S. Attorney, District of Massachusetts, press release of October 9, 2024: charges unsealed against Saitama leadership; two Saitama employees had pleaded guilty
  • SEC v. Armand, Hernandez, Kohli, and Tran, No. 1:24-cv-12586-AK (D. Mass., filed October 9, 2024), Litigation Release No. 26155: consent judgments entered April 15, 2025 as to Armand and Hernandez; the claims against the others stayed April 25, 2025
  • United States v. Hernandez, No. 1:23-cr-10135 (D. Mass.): guilty plea entered May 23, 2023
  • United States v. Armand, No. 1:24-cr-10014 (D. Mass.): guilty plea accepted January 30, 2024
  1. [[1]] Eighteen Individuals and Entities Charged in International Operation Targeting Widespread Fraud and Manipulation in the Cryptocurrency Markets (U.S. Attorney, District of Massachusetts, October 9, 2024)https://www.justice.gov/usao-ma/pr/eighteen-individuals-and-entities-charged-international-operation-targeting-widespreadaccessed 2026-09-01
  2. [[2]] SEC Litigation Release No. 26155, October 15, 2024https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26155accessed 2026-09-01
  3. [[3]] Etherscan token page for the Saitama Inu V1 contracthttps://etherscan.io/token/0x8b3192f5eebd8579568a2ed41e6feb402f93f73faccessed 2026-09-01
  4. [[4]] Etherscan token page for the SAITAMA V2 contracthttps://etherscan.io/token/0xce3f08e664693ca792cace4af1364d5e220827b2accessed 2026-09-01
  5. [[5]] IRS Office of Chief Counsel Memorandum 202302011, applicability of section 165 to cryptocurrency that has declined in valuehttps://www.irs.gov/pub/irs-wd/202302011.pdfaccessed 2026-09-01
  6. [[6]] IRS, Frequently Asked Questions on Virtual Currency Transactionshttps://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactionsaccessed 2026-09-01
  7. [[7]] CoinMarketCap quotes/latest for SAITAMA INU (SAITAMA), listing 32310, the 2024 contract that reuses the tickerhttps://pro-api.coinmarketcap.com/v2/cryptocurrency/quotes/latest?id=32310accessed 2026-09-01
  8. [[8]] 26 U.S.C. 67, 2-percent floor on miscellaneous itemized deductions, as in effect August 31, 2026https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section67&num=0&edition=prelimaccessed 2026-09-01
  9. [[9]] Securities and Exchange Commission v. Kohli, No. 1:24-cv-12586 (D. Mass.), docket (CourtListener RECAP archive)https://www.courtlistener.com/docket/69240470/securities-and-exchange-commission-v-kohli/accessed 2026-09-22
  10. [[10]] United States v. Hernandez, No. 1:23-cr-10135 (D. Mass.), docket (CourtListener RECAP archive)https://www.courtlistener.com/docket/69239694/united-states-v-hernandez/accessed 2026-09-22
  11. [[11]] United States v. Armand, No. 1:24-cr-10014 (D. Mass.), docket (CourtListener RECAP archive)https://www.courtlistener.com/docket/69239906/united-states-v-armand/accessed 2026-09-22

Recover or write off?

OptionCostOutcome
A sale on a market that still lists the tokenExchange fees and gasA closed transaction. The loss goes on Form 8949 and Schedule D.
A swap from the first contract to the successor, then holdingGasNo loss is booked while the holder still has a token that trades.
A worthlessness claim while the token still tradesNothing todayThe IRS memo says a token that still trades is not worthless.

Not financial or tax advice. I am not a CPA or adviser.