FTX bankruptcy case develops with a $44 billion call in claims from the IRS, another jab against FTT and XRP

  • The US IRS has filed a claim worth $44 billion against the estate of bankrupt crypto exchange FTX and its affiliated entities.
  • The claim includes $20 billion in partnership taxes and millions in withheld income and payroll taxes.
  •  The news comes after the SEC named FTT and XRP among 76 unregistered and, therefore, illegal brands.

The FTX bankruptcy case has a new development as the United States Internal Revenue Service (IRS) has filed claims worth around $44 billion against the estate of the now-defunct FTX exchange and its associate firms.

Also Read: FTX creditors await retrieval of lost funds as Alameda Research receives $57.5 million in Tether

IRS presents 45 claims against FTX and associate entities

Bankruptcy filings from April 27 and 28 show that the IRS has presented 45 claims against FTX and its associate firms- FTX.US’s legal entity West Realm Shires, the parent company of LedgerX and LedgerPrime, Ledger Holdings,  and Blockfolio, among others. Alameda Research LLC and Alameda Research Holdings Inc. are among the ‘others,’ bearing the largest claims of $20.4 billion and $7.9 billion for the former in partnership taxes, and two claims totaling $9.5 billion against the latter in “withheld income taxes and payroll taxes.”

The claims, classified under “Admin Priority, make the IRS’s case a priority over the claims made by other creditors in the FTX bankruptcy case. Nevertheless, the IRS has refused to provide further details, with a spokesperson saying:

Federal law prevents the IRS from confirming or denying any correspondence with regard to any taxpayer case.

The IRS claim is a bearish development for the ticker of the FTT ecosystem, the FTT token. However, it is not the only one. In a recent development, the US Securities and Exchange Commission (SEC) has named FTT among 76 illegal cryptocurrencies, citing “unregistered brands.”

XRP community under threat

The US SEC has listed FTT tokens among 76 unregistered cryptocurrencies. This means it is now illegal, mainly because it cannot trade under any existing American financial law. Besides the FTT token, other familiar names feature in the list, including TerraUSD (TUSD), Ripple (XRP), and Dash (DASH).

The SEC list of illegal tokens has implications on XRP price, considering Ripple has an ongoing legal tussle with the regulator going back three years. Now that XRP officially bears the stamp ’ illegal,’ the commission could slash the lawsuit and declare Ripple at fault.

The development is concerning, considering most of the ‘illegal 76’ are already listed on exchanges. This hints at possible future attacks from the financial regulator on exchanges. Meanwhile, market participants should expect a curve of sweeping changes in the industry, from simply excluding some tokens to shutting down societies.

Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: April lows could prove significant for BTC and ETH

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Why Bitcoin remains sideways despite record BTC ETF inflows

Why Bitcoin remains sideways despite record BTC ETF inflows

Bitcoin's relative range-bound movement in the past few months, despite record net inflows of $12 billion across spot Bitcoin ETFs, has sparked worry among investors. Many analysts predicted a highly bullish outlook for Bitcoin when the ETFs launched.

More Bitcoin News

UwU Lend offers bounty reward to uncover its exploiter

UwU Lend offers bounty reward to uncover its exploiter

In a Thursday broadcast, UwU Lend consents to a $5 million bounty reward in ETH to whoever discovers the identity of the hacker(s) who breached their protocol. The DeFi protocol has reportedly suffered another breach, which cost $3.72 million.

More Cryptocurrencies News

AAVE price tumbles 20% in 2024 despite doubling its total value locked

AAVE price tumbles 20% in 2024 despite doubling its total value locked

AAVE, a decentralized crypto lending platform, has noted a massive spike in the total value of assets locked (TVL). Rising TVL is considered indicative of higher relevance among market participants and trust in the platform. 

More Aave News

SEC Chair says Ethereum ETF S-1 approvals likely to come over the summer

SEC Chair says Ethereum ETF S-1 approvals likely to come over the summer

Ethereum was down nearly 5% on Thursday as SEC Chair Gary Gensler suggested spot ETH ETFs will likely receive approval over the course of the summer. The update was accompanied by mixed sentiment from derivatives traders.

More Ethereum News

Bitcoin: Is BTC ready for a new all-time high?

Bitcoin: Is BTC ready for a new all-time high?

Bitcoin whales have increased buying activity to the highest level in two months. Investors show no signs of FOMO despite BTC’s recent tussle with the  $70,000 mark. US spot Bitcoin ETFs experienced a notable uptick in activity, reflecting growing market interest.

Read full analysis