The FTX bankruptcy case filed last November is shaping up to be a long and complex legal battle that could take years to resolve. This is due to the massive scale of clawback claims FTX is filing to recover funds it paid out before its insolvency, as well as a whopping $24 billion unpaid tax bill from the IRS.
According to legal experts, clawback claims are usually settled out of court to avoid expensive litigation. However, with the amount of money at stake in the FTX case, some recipients of payouts before the bankruptcy will likely put up a fight. For example, FTX is seeking to recover $1 billion from crypto exchange ByBit and $71 million from its philanthropic arm.
The company is also suing former CEO Sam Bankman-Fried and other executives for alleged fraud. More lawsuits targeting FTX’s political donations and investments could arise in the future as well. This web of complex legal battles means resolving the clawback claims could take considerable time.
On top of that, FTX must deal with the IRS, which says the company owes $24 billion in unpaid taxes. Fighting this massive tax bill in court while simultaneously pursuing clawback claims ensures the bankruptcy case will be tied up for the foreseeable future.
The sheer number of entities involved and massive amounts of money make the FTX bankruptcy uniquely challenging. Don’t expect a quick resolution to this crypto saga anytime soon.
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