News Report
December 13, 2023

FTX Counters IRS’s $24 Billion Tax Claim Amid Bankruptcy Proceedings

In Brief

FTX’s legal challenge against the IRS’s $24 billion tax demand amid crypto exchange bankruptcy proceedings.

FTX Counters IRS’s $24 Billion Tax Claim Amid Bankruptcy Proceedings

In a recent legal development, FTX, the cryptocurrency exchange that declared bankruptcy, is contesting a massive $24 billion tax demand from the U.S. Internal Revenue Service.

This challenge poses significant questions regarding the potential recovery for the victims of FTX’s downfall.

FTX argues in its latest court filing that the IRS’s demand for $24 billion has no legal basis and is excessive compared to the exchange’s actual income. The exchange emphasizes that such a claim is groundless and would significantly diminish the available funds for compensating defrauded customers.

FTX is concerned that satisfying the IRS’s tax claim would deplete resources meant for victim compensation. The exchange warns that if the court upholds the IRS’s demand, the victims may receive minimal or no substantial restitution.

FTX’s dispute with the IRS comes after its bankruptcy filing in November last year, following revelations about its financial mismanagement. The situation worsened with the conviction of its founder, Sam Bankman-Fried, on fraud and conspiracy charges, with sentencing set for February 2024.

The U.S. government, responding to FTX’s objections, asserts that its aim is to accurately assess FTX’s tax liabilities, not to levy an exorbitant amount.

While FTX recognizes its duty to resolve any tax obligations, the exchange criticizes the government’s approach as potentially causing unnecessary delays in case resolution. This standoff illustrates the complexities of unraveling the aftermath of a major crypto exchange’s collapse.

This legal confrontation between FTX and the IRS highlights not only the intricacies of bankruptcy and tax law but also the broader implications for the recovery efforts of those affected by the exchange’s collapse. The outcome of this case will be crucial in shaping the future of both the IRS’s claims and the restitution process for FTX’s defrauded customers.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

More articles
Nik Asti
Nik Asti

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Hot Stories

Turning Domains into the Backbone of Web3 with D3

by Victoria d'Este
May 23, 2025
Join Our Newsletter.
Latest News

The Calm Before The Solana Storm: What Charts, Whales, And On-Chain Signals Are Saying Now

Solana has demonstrated strong performance, driven by increasing adoption, institutional interest, and key partnerships, while facing potential ...

Know More

Crypto In April 2025: Key Trends, Shifts, And What Comes Next

In April 2025, the crypto space focused on strengthening core infrastructure, with Ethereum preparing for the Pectra ...

Know More
Read More
Read more
Gate’s GET To Transform Entertainment With Web3-Powered Participatory Economy
News Report Technology
Gate’s GET To Transform Entertainment With Web3-Powered Participatory Economy
May 23, 2025
Bybit Launches P2P Schools Initiative To Advance Peer-to-Peer Trading Education
Education Markets News Report Technology
Bybit Launches P2P Schools Initiative To Advance Peer-to-Peer Trading Education
May 23, 2025
FIFA, MEXC, And More: This Week’s Biggest Crypto Partnerships To Watch
News Report Technology
FIFA, MEXC, And More: This Week’s Biggest Crypto Partnerships To Watch
May 23, 2025
Sui Network Releases Whitelist Feature To Facilitate Recovery Of Frozen Funds Following $220M Cetus Hack
News Report Technology
Sui Network Releases Whitelist Feature To Facilitate Recovery Of Frozen Funds Following $220M Cetus Hack
May 23, 2025