- 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.
From the FTX Kroll page - what is going on here? The IRS is claiming $25bn+ in court? Can someone smarter than me please explain. pic.twitter.com/luz4SAwWDX— Woodrow Oates Montague (@sadvalueinvestr) May 10, 2023
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.
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