FTX Seeks Zero Valuation for 'Sam Coins' in Ongoing Bankruptcy Case
Summary:
FTX, a troubled cryptocurrency platform, is arguing in a bankruptcy court that the value of certain investor claims on "Sam Coins" should be set at zero. These tokens are closely associated with FTX's imprisoned founder, Sam "SBF" Bankman-Fried. FTX's lawyers are asking for severe discounts on claims related to the native tokens of Maps (MAPS), Oxygen (OXY), Serum (SERUM), and Boba (BOBA). Investors contradict this, attributing their tokens' worth at hundreds of millions of dollars. Amid the dispute, the presiding judge described digital assets as having "no inherent value" and that their value is derived solely from trades. The court is yet to rule on how to estimate the disputed crypto assets' value.
Underfire cryptocurrency platform, FTX, is seeking to reject certain investor demands regarding the so-called "Sam Coins," arguing that their value should be set at zero in an ongoing bankruptcy litigation. At a recent hearing on March 26, FTX's legal team requested Judge John Dorsey of the Delaware bankruptcy court to significantly discount the claims put forward by customers for various digital tokens closely associated with the incarcerated founder of FTX, Sam "SBF" Bankman-Fried. Brian Glueckstein, a lawyer for FTX, contended that claims regarding the native tokens of travel platform Maps (MAPS), DeFi brokerage Oxygen (OXY), decentralized exchange Serum (SERUM), and hybrid blockchain Boba (BOBA) should either be massively discounted or set to zero. Nonetheless, investors appraised the tokens they hold at multi-million dollar values and presented corresponding calculations to the court.
FTX's valuation specialist, Sabrina Howell, inferred that because the company controlled over 95% of the OXY and MAP tokens, closely associated with SBF, it would take several decades to liquidate them. However, creditor lawyer Kurt Gwynne countered that the company tasked experts with providing unfairly low quotations.
As per their analysis, FTX insists claims linked to MAPS and OXY tokens, valued over $600 million based on current rates, should be deemed worthless. Simultaneously, claims tied to SERUM tokens, worth $509 million, should be marked down roughly 58%.
Contrarily, FTX customers want the estimates provided by FTX's lawyer rejected, alleging that the four disputed digital assets, the Sam Coins, surpass a total value of $1.1 billion. While describing cryptocurrencies as possessing "no inherent value," Judge Dorsey accepted that assigning a concrete value to digital assets is challenging. He elaborated: "The only value is the outcome of the trades themselves. As far as I understand, cryptocurrency trades purely on sentiment."
After hearing both sides, the judge stated he would consider the matter before determining how to estimate the contested crypto assets' value.
Among the relevant tokens, MAPS is the native Solana-based token for the Web3 travel platform Maps.me, Alameda-backed, which has plunged 98% from its all-time high of $2 in May 2021, trading at $0.03 currently. Likewise, Alameda Research-backed Oxygen DeFi brokerage's token, OXY, has nosedived 98% from its ATH and is trading at $0.08 presently. SERUM, the decentralized exchange token supported by FTX, has declined by 99.5% from its topmost value, with a current price of $0.06.
Last year, the US government found Bankman-Fried guilty on seven counts of fraud, almost one year following FTX's downfall. Prosecutors recently suggested a lengthy 50-year sentence, but his defense team contests this as an unfair portrayal of him as a "depraved super-villain".
Arijit Sarkar contributed additional reporting.
Published At
3/27/2024 2:35:10 PM
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