In an unexpected twist, the financial woes of the now insolvent FTX cryptocurrency exchange have deepened with the Internal Revenue Service (IRS) issuing a tax demand totaling a colossal $24 billion. This claim has been met with staunch opposition from FTX, with a series of arguments emerging from recent court documents submitted in response to the IRS’s levying.
Foremost among the points of contention is the assertion that FTX, throughout its brief three-year period of activity, did not distribute any dividends or profits that could substantiate the immense tax charge. Furthermore, FTX’s legal defense maintains that the company suffered sizeable financial setbacks, a stance that starkly contradicts any suggestion of taxable income that could justify the IRS’s audacious claim.
Additionally, counsel for FTX has underlined that the exchange is currently undergoing liquidation, its operations limited strictly to actions essential to the process. The representatives argue that diverting funds to satisfy the IRS’s demand would strip the assets intended for FTX’s wronged investors, disadvantaging those who have already endured tremendous financial adversity.
As the day in court looms, FTX is confident that a judicially managed estimation procedure will expose the exchange’s notable losses while in operation, rendering the IRS’s assertion unfounded.
Notably, FTX’s team has successfully recouped approximately $7 billion in assets to date, among which $3.4 billion is in various cryptocurrencies. These recoveries highlight the intricate monetary puzzle that the legal battle with the IRS presents.
Amidst the unfolding legal drama, the outcome of FTX’s case is set to resonate throughout the realm of cryptocurrency taxation and shape the prospects of reimbursement for the exchange’s creditors.
In the dynamic world of cryptocurrencies, FTX’s native token, FTT, has not been immune to market fluctuations, recently undergoing a more than 5% value contraction over a day, further complicating the company’s litigious challenges.
Following a three-month long trading pattern that ranged from $0.9 to $1.2, FTT saw a striking climb, reaching a zenith this year at $6.042—prices unseen since the previous November. Despite this uptick, the token has now regressed to around $4.8, the next support pegged at $4.45 should the downtrend persist.
Nevertheless, there are glimmers of optimism. FTT stands robustly above significant moving averages, signaling potential for an upward trajectory. The token’s trading pattern—marked by successive higher highs and higher lows—has delineated a bullish trend that, should it persist and stay unswayed by the legal proceedings, might herald an era of appreciation for FTT in the ensuing months.
