FTX has settled its dispute with the Internal Revenue Service over its $24 billion in unpaid taxes, and can now focus on refunds

A new stage in the FTX bankruptcy process

According to Bloomberg, the FTX exchange, in the midst of its bankruptcy process, has resolved the dispute with the Internal Revenue Service, the US Internal Revenue Service.

The agency responsible for collecting taxes had previously requested the exchange to pay 44 billion dollars to cover taxes evaded by CEX. The request was later lowered to $24 billion, and then further reduced to almost $1 billion.

200 million dollars will have to be paid within 60 days of the entry into force of the restructuring plan proposed by FTX, while another 685 million dollars will have to be paid after the refunds to creditor customers.

The next step for FTX

Industry insiders say the settlement would be the last significant hurdle FTX has cleared to finally resolve its bankruptcy case. A failure to reach a settlement could have meant a lengthy and unpredictable litigation between the exchange and the IRS, with the exchange unable to resolve issues with customers.

FTX has previously contested the IRS’s $24 billion claim, but has acknowledged that it has a “significant tax liability to the agency.” A claim that is too burdensome for the exchange would have raised new and dangerous legal issues.

The settlement will become effective after it is approved by a bankruptcy judge, as well as after FTX’s restructuring plan goes into effect.