FTX has reached a settlement with its largest
creditor, the IRS. The agreement resolves a significant $24 billion tax dispute
that has been looming over the exchange’s restructuring process. Initially, the
IRS claimed FTX owed over $44 billion in taxes, but this amount has been
substantially reduced as part of the settlement.
Under the terms of the settlement, FTX will pay the
IRS $200 million as a priority tax claim within 60 days of the court’s approval
of the exchange’s reorganization plan, as highlighted in the filing presented
yesterday (Monday). Additionally, the IRS will collect $685 million, which will
be paid after other creditors and customers have been compensated.
The settlement provides much-needed certainty for
FTX’s creditors and customers regarding the recovery process. By resolving the
tax dispute, FTX can now focus on implementing its reorganization plan and
distributing assets to stakeholders. The agreement also mitigates the risk of
prolonged litigation, which could have further complicated the exchange’s
bankruptcy proceedings.
While FTX acknowledges its tax obligations, it
disagrees with the IRS regarding the amount and specific reasons for the tax
liability. The exchange argues that it should not be held responsible for funds
misappropriated by its former CEO, Sam Bankman-Fried, and disputes the IRS’
calculations for employment taxes related to executive salaries, Cointelegraph
reported.
Additionally, FTX contends that it has valid
deductions and losses that the IRS is unfairly disallowing due to documentation
issues.
Expect ongoing updates as this story evolves.
FTX has reached a settlement with its largest
creditor, the IRS. The agreement resolves a significant $24 billion tax dispute
that has been looming over the exchange’s restructuring process. Initially, the
IRS claimed FTX owed over $44 billion in taxes, but this amount has been
substantially reduced as part of the settlement.
Under the terms of the settlement, FTX will pay the
IRS $200 million as a priority tax claim within 60 days of the court’s approval
of the exchange’s reorganization plan, as highlighted in the filing presented
yesterday (Monday). Additionally, the IRS will collect $685 million, which will
be paid after other creditors and customers have been compensated.
The settlement provides much-needed certainty for
FTX’s creditors and customers regarding the recovery process. By resolving the
tax dispute, FTX can now focus on implementing its reorganization plan…
