TX, once a leading digital assets trading platform, is facing significant challenges in its bankruptcy recovery due to the Internal Revenue Service (IRS)'s demand for an exorbitant $24 billion tax.
This amount is triple the actual funds held by FTX, complicating the process of refunding customers affected by the platform's collapse.
FTX's Decline and Alleged Misuse of Funds
FTX, which went bankrupt in November of the previous year along with over 120 subsidiaries, has been embroiled in controversy.
Co-founder Sam Bankman-Fried is accused of misusing customer funds for personal expenses, including private jets, political donations, and lavish gifts.
IRS's Excessive Tax Demand
In a recent filing, FTX leadership disclosed that the company did not generate profit or revenue in the past three years. Despite this, the IRS has demanded $24 billion in taxes.
FTX asserts that it never distributed dividends or earnings that could justify such a high tax claim.
Impact on FTX Customers
The FTX leadership, through the filing, expressed concern that fulfilling the IRS's demand might involve using customer funds, further victimizing those who lost money due to FTX's bankruptcy and fraud.
The company argues that the IRS should reconsider its approach to avoid harming these customers.
Dispute Over Tax Calculation
FTX has also alleged that the IRS employed incorrect methods in calculating the tax and associated fines.
Initially, the IRS demanded $44 billion in April, which was amended to $43 billion in September and later reduced to $24 billion in November.
FTX Token (FTT) Price Movements
The native token of FTX, FTT, has been experiencing a surge in trade price, with a 70% increase in the last 30 days.
However, this rise is considered manipulation, as FTX’s current leadership has stated they will not use FTT tokens in any future plans related to the exchange.
Conclusion: Challenges in FTX's Recovery and IRS Negotiations
FTX's efforts to recover and refund customers are significantly hampered by the IRS's tax demands.
The ongoing negotiations and tax dispute complicate an already intricate bankruptcy process, affecting both the company's recovery and the reimbursement of affected customers.