The recent bankruptcy of cryptocurrency exchange platform FTX Trading Ltd. is unsettling for stakeholders. It also has tax implications. FTX is only the latest crypto platform to enter Chapter 11 bankruptcy protection, after Celsius Network and Voyager Digital earlier this year. With no real precedent for large-scale bankruptcy in the crypto industry, tax consequences are unclear. Courts will have to decide which customers qualify as creditors and which liquidated assets belong to them. Other questions: When will FTX’s assets be valued and will the company pay creditors in crypto or regular currency? This year, even “stable” cryptocurrencies such as Bitcoin have lost significant value.
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