11 months ago
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Tax dispute with IRS
Lawyers for the bankrupt cryptocurrency exchange FTX filed new documents on the 10th in the U.S. Delaware Bankruptcy Court. The U.S. Internal Revenue Service (IRS) requested that FTX show how it estimated the amount of taxes it is charging.
By way of background, the tax authority, the IRS, is claiming about 3.5 trillion yen ($24 billion) in income taxes, employment taxes, and penalties that FTX and its affiliates should have paid from 2018 to 2022. Please note that this is still under investigation and the numbers are not final.
The IRS had requested approximately 6.4 trillion yen (approximately $44 billion) in April, but the amount was revised to $43 billion in September and further reduced to $24 billion in November.
Meanwhile, FTX’s lawyers told the IRS that FTX had never distributed any dividends or profits in three years and that it had “never earned an amount that would support the $24 billion tax claim.” “It was,” he argues.
Lawyers argued that the IRS’s claims would also harm the victims of the FTX collapse.
The only way for the IRS to recover the funds it claims is to take away the funds that should be returned to the victims.
There is no basis to claim taxes on FTX, and if the IRS continues this move, it will only delay the distribution of funds to those truly harmed.
As of April, the new FTX, led by CEO John J. Ray, had collected about 1 trillion yen (more than $7.3 billion) in cash and liquid cryptocurrencies. The IRS bill is more than three times that amount.
In late November, FTX filed a document with bankruptcy court requesting that the IRS charges be dismissed as baseless.
At the time, it said FTX had no tax liability and had incurred more than $11 billion in tax losses. Rather, they argued that the tax should be deducted considering the losses.
The next hearing in the FTX bankruptcy case is scheduled for December 13th.
FTX’s former CEO, Sam Bankman-Fried, was found guilty on all seven charges in New York District Court in November. In addition, foreign bribery charges will be heard in a separate court next year.
connection: Sam, former CEO of virtual currency exchange FTX, found guilty on all seven charges.
Movement of staking and asset sales
FTX is currently making various attempts to recover its assets. In October, we started staking Solana (SOL) worth over 18.2 billion yen and Ethereum (ETH) worth over 4.5 billion yen.
connection: Bankrupt FTX stakes $150 million worth of Solana and Ethereum
What is staking?
A system in which by owning a specific virtual currency, you contribute to the management of that currency’s blockchain network and receive compensation in return. Strictly speaking, it is not only necessary to hold virtual currency, but also to deposit it on the network. It can be said that it is similar to a system where you save legal currency in a bank account and receive interest after a certain period of time. Furthermore, staking can be done with currencies that use the PoS (Proof of Stake) consensus algorithm.
Virtual currency glossary
In late November, a Delaware court approved FTX’s proposed sale of Grayscale and Bitwise crypto investment trusts worth a total of 128 billion yen ($874 million).
Recently, it was revealed that he deposited a total of $23.59 million in assets such as ETH, ALEPH, AVAX, LINK, SOL, and UNI to Binance, Coinbase, and OKX over the four days ending on the 9th.
FTX and Alameda moved out $23.59M worth of 19 assets to Binance, Coinbase, OKX, GalaxyDigital OTC in the past 4 days, according to @spotonchainincluding: 3,150 ETH ($6.8M) 59.6M ALEPH ($6.41M) 3.60M CRV ($2.48M) 33,388 AVAX ($990K) 50,282 LINK ($848K) and $6.07M worth of 14… pic.twitter.com/5k6a7nMOVN
— Wu Blockchain (@WuBlockchain) December 9, 2023
connection: FTX Estate can sell $870 million worth of crypto investment trusts, court approves
The post Cryptocurrency exchange FTX disputes 3.5 trillion yen income tax with U.S. IRS, claiming it is disadvantageous to creditors appeared first on Our Bitcoin News.
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