IRS to Receive $200 Million in FTX Bankruptcy Settlement

The Internal Revenue Service (IRS) will get a $200 million priority claim in the FTX bankruptcy case, which is to be paid within 60 days once FTX’s proposed restructuring plan is approved.

Additionally, the IRS will receive a $685 million subordinate claim, to be paid only after customers and other creditors, depending on the availability of funds.

This settlement significantly reduces the IRS's original $24 billion claim, allowing FTX to proceed with substantial customer recoveries. By resolving this claim, FTX avoids prolonged and uncertain litigation with its largest creditor, ensuring that customer payments are prioritized.

The settlement, filed in the US Bankruptcy Court for the District of Delaware, brings clarity to the IRS's claims and facilitates a swift resolution of FTX's Chapter 11 cases.

FTX acknowledged the possibility of a significant tax liability but disputed the $24 billion claim, noting that it raised complex legal issues. The settlement will take effect upon approval by a bankruptcy judge and once FTX's overall restructuring plan is in place.