FTX agrees settlement in $24b IRS tax case

As a long-term crypto investor with a deep understanding of the industry, I’ve witnessed firsthand the rollercoaster ride that is FTX’s bankruptcy saga. The recent news of FTX agreeing to pay $885 million to settle a tax claim with the Internal Revenue Service (IRS) marks another significant step toward full creditor payments.

FTX reached an agreement with the Internal Revenue Service (IRS) to pay them $885 million as part of a larger settlement for a $24 billion tax debt that was imposed during the company’s bankruptcy proceedings.

As a researcher examining the latest developments with FTX’s bankruptcy case, I came across a significant detail: FTX has agreed to pay the Internal Revenue Service (IRS) $200 million as part of their priority claims. This payment is expected to be made within two months from the approval of the court-sanctioned creditor repayment plan.

As a crypto investor following the FTX case closely, I can tell you that although FTX’s legal team acknowledged the potential for substantial tax liabilities, the estate contested the IRS’s $24 billion claim. Furthermore, the troubled crypto company emphasized that such a large tax payment could negatively impact individual creditor refunds.

The IRS is claiming an additional debt of $685 million beyond the initial $200 million payment, but they’ve labeled it as a “lower priority” debt. My estate will settle this obligation once sufficient funds have been raised after fulfilling customer payments.

FTX inches toward full bankruptcy payouts

The latest IRS settlement represents another milestone on FTX’s path to fulfilling creditor obligations following their bankruptcy filing in 2022. After collapsing under the guidance of its convicted founder, Sam Bankman-Fried, FTX filed for Chapter 11 protection in 2022.

Approximately two years have passed since Anthropic conducted share liquidations, discounted Solana (SOL) auctions, and numerous cryptocurrency recovery projects. At this point, they declared a debt repayment plan worth around $16 billion.

With approximately $12 billion in debts owed to creditors, the company has the potential to reimburse most of its customers an unusually high amount – up to 118% of their initial investments – during its bankruptcy proceedings.

In the meantime, some people believe that administrators and restructuring experts, led by bankruptcy specialist John J. Ray, stand to gain the most from the troubled company’s current situation. Notably, this distressed firm has authorized $500 million in compensation for law firms such as Sullivan and Cromwell, Paul Hastings, and Quinn Emanuel.

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2024-06-04 20:30