FTX Creditors And Injured Parties Get Bad News, New Ruling To Save Them?

December 14, 2023 2:13 pm Comments

The IRS has once again reared its ugly head and has now complicated the recovery process for injured parties of the FTX collapse.

Creditors and former clients of the now-bankrupt platform have been seeking to be made whole through the bankruptcy recovery process.

Stewards and custodians overseeing the bankruptcy process have already reportedly recovered $7 billion in assets.

Now, the IRS is claiming that FTX owes the government agency $24 billion in back taxes; that is roughly 3x the amount owed to FTX creditors and former customers.

A judge has come to the aid of the victims of FTX by issuing a ruling seeking to expedite the recovery process for the victims so they can get what they are owed before the IRS comes to collect.

Here’s more on the story:

According to The Block:

During its short three-year life, FTX never distributed dividends or earnings and “never earned anything anywhere near amounts that could support the IRS claims for $24 billion in taxes,” the lawyers wrote.

On the contrary, FTX lost a vast amount of money, they added.

Cryptopolitan had more on the recent ruling:

The judge emphasized the importance of avoiding unnecessary delays that could further complicate an already intricate case.

Judge Dorsey also offered a cautious perspective to the IRS concerning its expectations regarding the potential recovery amount.

Despite the customary precedence of the IRS in receiving payouts in corporate bankruptcy cases, the judge warned that the actual tax debt owed by FTX might not align with the IRS’s estimated $24 billion claim.

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.