- The IRS asserted 45 claims for a total of $44 billion, eventually reduced
- FTX’s bankruptcy administrators have recovered assets worth about $7B
The IRS has proposed a $24 billion tax bill, which is expected to eliminate any “meaningful recovery” intended for FTX creditors according to a statement from the bankrupt crypto exchange, Cointelegraph wrote, citing an FTX court filing.
The US tax authority began taking measures to recover tax debt from FTX and Alameda Research in May this year. At first, the IRS asserted 45 claims for a total of $44 billion against FTX and its subsidiaries. Eventually, that figure was reduced to $24 billion.
IRS claims are ‘meritless’
FTX asserted the IRS’ claims were meritless in a recent filing to a Delaware-based bankruptcy court. In addition, the exchange’s legal team insisted they would eat away at the funds meant to reimburse FTX victims if they took legal effect.
FTX’s lawyers stated that the claims would “effectively prevent” the majority of FTX creditors from getting meaningful recovery, and that these creditors were victims of fraud as well, adding:
There is simply no basis to support the IRS’s meritless claims that the Debtors owe tax in an amount that is orders of magnitude greater than any income the Debtors ever earned. The IRS’s reliance on its own processes only serves to delay distributions to those truly injured.
They also asserted that the $24 billion claim did not result from an estimation. The tax authority has not completed its audit yet. According to the filing, this could take another eight months. The US government and FTX will argue over whether the claim is legitimate before a court of law on Dec. 12.
Administrators recovered assets worth $7B
FTX’s bankruptcy administrators have recovered assets worth about $7 billion, which includes crypto worth $3.4 billion. Ex-FTX CEO Sam Bankman-Fried was convicted of all the fraud-related charges against him in court in November. He awaits sentencing on March 28, 2024.
