FTX debtors dispute IRS's $24 billion tax claim

Debtors linked to FTX have expressed concerns about the Internal Revenue Service (IRS) claiming $24 billion in taxes, cautioning that this issue might obstruct the return of customer funds. They argued in a Sunday filing that their earnings were far from the amount the IRS claimed, emphasizing significant losses instead.

Lawyers representing the bankrupt exchange described the situation as a zero-sum game. Initially, the IRS claimed $43 billion but later revised it to $24 billion. FTX's debtors contested the lack of basis for these claims, citing the US statement that the IRS claims "are not subject to estimation," placing the burden on FTX's debtors to disprove them, potentially taking months to resolve.

Continued disputes between FTX's debtors and the IRS might cause delays in the bankruptcy plan. The US provided an eight-month estimation schedule for further IRS investigation.

FTX, which declared bankruptcy in the previous November, faced additional challenges as its former CEO, Sam Bankman-Fried, was found guilty of fraud in November of the current year. The bankruptcy court approved FTX to sell its stakes in digital trusts managed by Grayscale Investments, valued at approximately $744 million last month, crucial for FTX's bankruptcy management strategy.

Amidst fraud allegations and a complex web of debts, FTX aimed to recover assets, including obligations to customers who invested cash and cryptocurrencies. To date, FTX's administrators have recovered around $7 billion in assets, including $3.4 billion in crypto, showcasing the extensive and intricate nature of the company's financial challenges.