FTX Argues to Devalue Tokens in Bankruptcy Court Amid Ongoing Case Linked to Jailed Founder
Summary:
Crypto exchange FTX is contesting some investor claims for a series of digital tokens linked to its imprisoned founder, Sam "SBF" Bankman-Fried. The case, presented in a Delaware bankruptcy court, proposes to devalue or nullify the investor claims on tokens affiliated with the Maps app, DeFi broker Oxygen, decentralized exchange protocol Serum, and the hybrid blockchain Boba. Despite the users' assertion that the tokens are worth hundreds of millions, FTX argues that these assets, collectively tagged as 'Sam Coins', should be considered valueless or significantly reduced in value. The matter awaits a ruling from the court.
The beleaguered crypto trading platform FTX is seeking to devalue some investor claims for a series of digital tokens, nicknamed "Sam Coins", linked to its imprisoned founder Sam "SBF" Bankman-Fried. FTX's legal team recently presented their case to Judge John Dorsey in a Delaware bankruptcy court, urging him to drastically cut or even nullify the worth of these investor claims on certain tokens affiliated with the travel app Maps (MAPS), DeFi broker Oxygen (OXY), decentralized exchange protocol Serum (SERUM), and the hybrid blockchain Boba (BOBA). FTX's lawyer, Brian Glueckstein, stated that customers' claims for these tokens should be significantly lowered or nullified, despite the users' insistence that their combined worth is in the hundreds of millions. Glueckstein pointed out that FTX had professionally assessed the worth of the tokens as of the petition date, resulting in the suggestion that their value be extensively curtailed.
FTX's appraisals specialist, Sabrina Howell, deduced that given FTX's possession of over 95% of the OXY and MAP tokens, liquidating them would take decades. Nevertheless, the creditors' lawyer, Kurt Gwynne, alleged that FTX was deliberately understating their worth. As per FTX's evaluation, deemed the MAPS and OXY tokens, presently worth over $600 million, as valueless, while the SERUM tokens, estimated at $509 million, should see a drop in their worth by nearly 58%. However, FTX clients countered these figures, asserting that their digital assets, termed as Sam Coins, are collectively worth over $1.1 billion. The vexing question of accurately ascertaining the value of cryptocurrency led Judge Dorsey to comment that digital assets don't possess “inherent value”, and their worth stems solely from trading activity. He is due to rule on the disputed cryptocurrencies' worth after considering arguments presented by both parties.
The tokens in question, MAPS, OXY, and SERUM, are all connected with Alameda Research-backed platforms and have plummeted dramatically since reaching their peak in May 2021. Bankman-Fried, FTX's founder, was found guilty on seven fraud counts by the U.S. government following FTX's collapse a year ago, and could potentially serve 50 years in prison. His defense team has argued that this maximum sentence unfairly depicts him as a grotesque villain.
Published At
3/27/2024 1:17:17 PM
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