FTX Reaches $885 Million Settlement with IRS
In a recent report by Bloomberg Law, the bankrupt crypto exchange formerly run by Sam Bankman-Fried, FTX, has finalized a settlement with the Internal Revenue Service (IRS) over a $24 billion claim.
Settlement Details
- FTX to pay IRS $200 million within 60 days
- Lower priority claim of $685 million to be paid on a subordinated basis to customers and other creditors
- Settlement detailed in a filing by FTX in US Bankruptcy Court
The resolution of this claim allows FTX to move forward with distributing significant customer recoveries, a crucial step in the exchange’s bankruptcy proceedings.
Clarity and Progress
- IRS claims size now defined
- Paves the way for swift resolution of Chapter 11 bankruptcy cases
- Funds to be promptly distributed to creditors and customers
This settlement brings much-needed clarity to FTX’s financial situation and ensures a path forward in resolving the legal issues surrounding the bankruptcy.
Payment to Customers and Creditors
FTX has reassured its customers that they will receive 98% of their claims in cash, ensuring they’re repaid in full and at least 118% of the allowed claims.
Assets and Repayment
- FTX secures $14.5 billion to $16.3 billion from asset sales
- Assets sold include those under the control of various entities associated with FTX
The repayment to customers and creditors will be a significant relief, allowing them to recoup a substantial portion of their investments in the exchange.
Resolution and Future Outlook
Final approval of the settlement is pending a bankruptcy judge’s endorsement and successful implementation of FTX’s restructuring plan, signaling progress in resolving the bankruptcy proceedings.
Restructuring Efforts
- Focus shifts to restructuring efforts
- FTX works towards meeting obligations to customers and creditors
With this settlement in place, FTX can dedicate its efforts to reorganizing its operations and meeting its financial responsibilities to stakeholders.
Market Update and Outlook
FTX’s native token FTT is currently trading at $1.60, reflecting a 3% increase in the last 24 hours, in line with the general market trend.
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