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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.
If you’re a FTX creditor the government just stole your excess returns above when they « sold the bottom ».
— TCB (@1984_is_today) June 4, 2024
The government is stealing from scam victims. A lot of the funds went to politicians.
It’s all a big criminal rackethttps://t.co/UoZn7VpS17
