4 ms·

IRS gets priority over creditors but what about the users of the platform that? Are they categorized as creditors?

rootusrootus 3y ago
I'd figure that for most people FTX would be part of an investment strategy (or gambling), not any kind of bank. So these are not depositors, they are investors, probably lowest on the priority list. They will get wiped out.
JumpCrisscross 3y ago
> what about the users of the platform Mixed precedence [1]. Where assets were ringfenced, the courts are treating those users as asset owners. Unsecured creditor is the default. Lowest rung. This is true pretty much across web3/crypto. [1] https://www.ft.com/content/a87860bf-a8bf-4669-a152-de465c83a19c https://www.ft.com/content/a87860bf-a8bf-4669-a152-de465c83a...
vitehozonage 3y ago
Yes they are just creditors. So IRS is basically trying to take from the users by filing it in this way. Great way to serve the public...
- outside1234 3y ago
  This is what is in the prospectus that you read before you put your money in these firms. They are subject to normal liquidation seniorities.
- renlo 3y ago
  It's like a thief steals all of the money from your bank account, he gets arrested, you file a claim to get your money back from his accounts, but before you can the IRS swoops in to claim all of the money because the thief didn't claim your stolen money when he filed his income taxes. I understand that all of the FTX depositors (technically "creditors") should have read the fine print, but that's what this feels like at least.
  - kobalsky 3y ago
    > should have read the fine print from what I have read FTX was the only major exchange that didn't claim ownership over your uninvested funds in the fine print, which is the crux of the situation. people using them as a wallet were not investing nor getting interest in their deposits.
  - bearjaws 3y ago
    Lol what? FTX stole everyone's money, the IRS is just collecting what is owed...
    - fallingknife 3y ago
      They're not owed that money. Would take almost $600 billion in payroll or over $100 billion in profit to owe a $44 billion tax bill, and FTX doesn't come close to that.
  - martin8412 3y ago
    Gee, I wonder why the SEC isn't happy about exchanges selling unregistered securities to retail investors. They should absolutely have cracked down on it way earlier, but unfortunately regulatory agencies work rather slow. You threw your money in the local wishing well and are now upset that it got confiscated with your money inside it for unpaid taxes.
    - fallingknife 3y ago
      It's not a matter of slow. Coinbase has been around since 2012 and it doesn't take 10 years. The SEC had no intent on cracking down and didn't even consider most of the market to be securities at all. Here's Gensler saying so himself in 2018 https://twitter.com/ZK_shark/status/1650689125580668931 https://twitter.com/ZK_shark/status/1650689125580668931

I'd figure that for most people FTX would be part of an investment strategy (or gambling), not any kind of bank. So these are not depositors, they are investors, probably lowest on the priority list. They will get wiped out.

JumpCrisscross 3y ago

> what about the users of the platform Mixed precedence [1]. Where assets were ringfenced, the courts are treating those users as asset owners. Unsecured creditor is the default. Lowest rung. This is true pretty much across web3/crypto. [1] https://www.ft.com/content/a87860bf-a8bf-4669-a152-de465c83a19c https://www.ft.com/content/a87860bf-a8bf-4669-a152-de465c83a...

vitehozonage 3y ago

Yes they are just creditors. So IRS is basically trying to take from the users by filing it in this way. Great way to serve the public...

outside1234 3y ago
This is what is in the prospectus that you read before you put your money in these firms. They are subject to normal liquidation seniorities.
renlo 3y ago
It's like a thief steals all of the money from your bank account, he gets arrested, you file a claim to get your money back from his accounts, but before you can the IRS swoops in to claim all of the money because the thief didn't claim your stolen money when he filed his income taxes. I understand that all of the FTX depositors (technically "creditors") should have read the fine print, but that's what this feels like at least.
- kobalsky 3y ago
  > should have read the fine print from what I have read FTX was the only major exchange that didn't claim ownership over your uninvested funds in the fine print, which is the crux of the situation. people using them as a wallet were not investing nor getting interest in their deposits.
- bearjaws 3y ago
  Lol what? FTX stole everyone's money, the IRS is just collecting what is owed...
  - fallingknife 3y ago
    They're not owed that money. Would take almost $600 billion in payroll or over $100 billion in profit to owe a $44 billion tax bill, and FTX doesn't come close to that.
- martin8412 3y ago
  Gee, I wonder why the SEC isn't happy about exchanges selling unregistered securities to retail investors. They should absolutely have cracked down on it way earlier, but unfortunately regulatory agencies work rather slow. You threw your money in the local wishing well and are now upset that it got confiscated with your money inside it for unpaid taxes.
  - fallingknife 3y ago
    It's not a matter of slow. Coinbase has been around since 2012 and it doesn't take 10 years. The SEC had no intent on cracking down and didn't even consider most of the market to be securities at all. Here's Gensler saying so himself in 2018 https://twitter.com/ZK_shark/status/1650689125580668931 https://twitter.com/ZK_shark/status/1650689125580668931