Bitrabo Editorial
According to a recent report by Bloomberg Law, FTX, the defunct crypto exchange previously led by Sam Bankman-Fried, has agreed on a settlement with the IRS concerning a $24 billion tax claim.
The settlement permits FTX to pay a reduced sum to the IRS, leading the way for the exchange to disburse significant recoveries to its customers.
FTX’s $885 Million Settlement
FTX will pay the IRS $200 million within 60 days of executing the proposed restructuring plan as part of the settlement terms detailed in a filing with the US Bankruptcy Court for the District of Delaware. Additionally, the IRS will receive a subordinate claim of $685 million, paid based on fund availability.
This resolution alleviates potential extended legal disputes between the crypto exchange and its main creditor, streamlining the bankruptcy process and facilitating customer fund distribution.
FTX had expressed concerns that upholding the IRS claim could impede customer fund reimbursements, making this settlement crucial for the exchange’s progress in bankruptcy proceedings.
Customers Set to Receive 98% Cash Repayment
FTX has pledged full repayment to customers, ensuring a minimum 118% cash repayment for 98% of customers, as disclosed in a recent press release. The company has garnered between $14.5 billion to $16.3 billion through asset sales to fund repayments.
Approval of the settlement is conditional on a bankruptcy judge and successful implementation of FTX’s broader restructuring plan, post which it will come into effect.
This agreement represents a significant stride in FTX’s bankruptcy resolution, allowing the exchange to concentrate on reorganization and meeting its obligations to customers and creditors.
FTX’s native token FTT is currently trading at $1.60, aligning with the market trend, showing a 3% surge in the last 24 hours.
Image source: Shutterstock, chart by TradingView.com