Amidst the potential revival of FTX, a cryptocurrency exchange, the company finds itself entangled in yet another legal dispute. Following a recent fraud scandal, FTX is now grappling with a legal battle concerning unpaid taxes. The U.S. government is pursuing a $24 billion tax claim against FTX, and unless a judge rejects this demand, funds may be diverted from the victims of the fraud.
FTX and IRS clash over unpaid tax
According to the recent report, in court on Tuesday, both sides will discuss the procedures to determine the legitimacy of the IRS claim. FTX wants a quick schedule to estimate the claim, arguing that it lost money during its three years of operation and owes the IRS a much smaller amount. The IRS, however, claims its audit is ongoing and opposes a premature estimation.
FTX argues that going through a court-supervised estimation process will reveal its losses and show it doesn’t owe a substantial amount to the IRS. The company also claims that any money it might be forced to pay would harm the victims of the FTX fraud.
Federal officials plan to amend the $24 billion claim to reclassify some as lower-priority, unsecured debt. They state that the government is not seeking a windfall but only wants to determine the correct amount of tax liabilities.
FTX’s FTT token remains unaffected
Despite the ongoing discussion regarding unpaid taxes, there is no apparent effect on FTX’s FTT token, as it is trading near $5. In the last 24 hours, it has even experienced a 3% upside movement. Meanwhile, top cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) are still struggling.
Additionally, last month, FTX founder Sam Bankman-Fried was sentenced for orchestrating a massive fraud that led to the collapse of the FTX exchange. The company filed for bankruptcy last year, and its administrators have recovered about $7 billion in assets, including $3.4 billion in cryptocurrency. Further, they are working to separate the complex web of debt owed to various creditors, including customers who invested in the platform.
