FTX Settles with IRS Over $24B Tax Bill

Creditors are one step closer to payouts, but Uncle Sam wants his cut first.
David C David C Jun 4, 20241 min read
FTX Settles with IRS Over $24B Tax Bill

FTX has reached a settlement with the IRS for a $200 million instead of $24 billion, clearing a significant hurdle in its bankruptcy proceedings.

What's the scoop:

  • Settlement Terms: FTX will pay the IRS a $200M priority claim, which must be paid before other claims, within 60 days of its restructuring plan's start, and a subordinate $685M claim payable after customers and other creditors.
  • Impact on Bankruptcy Proceedings: The settlement marks the end of an unpredictable legal battle between FTX and the IRS, which could have prevented customer payments. Now the estate can move on to resolving its debts and distributing funds to customers and creditors.

Bankless Take: 

This settlement allows FTX to move on to resolving its debts and redistributing funds, unhindered by additional legal fees. While the timeline for customer payouts remains unclear, the settlement does provide a clear path forward for a recovery that could come as soon as mid-year.

While it's a win for FTX that avoids a worse case scenario for creditors, it's unclear why Uncle Sam is jumping to the front of the line, while so many depositors are missing out on the returns of their investments.

David C

Written by David C

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David is a writer/analyst at Bankless. Prior to joining Bankless, he worked for a series of early-stage crypto startups and on grants from the Ethereum, Solana, and Urbit Foundations. He graduated from Skidmore College in New York. He currently lives in the Midwest and enjoys NFTs, but no longer participates in them.

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