Thomas Daniels
FTX has reached an agreement with the Internal Revenue Service (IRS) to settle a $24 billion tax claim by paying $885 million. This settlement emerges from the bankruptcy proceedings initiated by FTX.
According to a filing with the Bankruptcy Court for the District of Delaware, FTX will make a $200 million payment for priority claims to the IRS. This amount is required within 60 days following the implementation of a court-approved creditor repayment plan.
FTX’s legal representatives acknowledged the potential for significant tax liabilities but disputed the IRS’s $24 billion claim. They argued that a multi-billion dollar tax payment could substantially impact individual creditor reimbursements.
Beyond the $200 million priority payment, FTX owes the IRS an additional $685 million, classified as “lower priority.” This amount is to be paid when funds become available after customer payments have been satisfied.
FTX Advances Towards Full Bankruptcy Payouts
The IRS settlement is a crucial step toward fulfilling creditor payments after FTX filed for bankruptcy in 2022. The crypto exchange sought Chapter 11 protection following its collapse under the leadership of its convicted founder, Sam Bankman-Fried.
Nearly two years later, through the liquidation of Anthropic shares, discounted Solana (SOL) auctions, and various crypto recovery efforts, FTX has announced the availability of almost $16 billion for debtor distribution.
With the company owing approximately $12 billion to creditors, it is positioned to repay most customers up to 118% of their holdings—a rare achievement in bankruptcy cases.
However, some observers suggest that the principal beneficiaries are the administrators and restructuring professionals, led by bankruptcy veteran and CEO John J. Ray. The firm has sanctioned $500 million in fees to law firms such as Sullivan and Cromwell, Paul Hastings, and Quinn Emanuel.
