FTX wants to zero out claims on ‘Sam Coins’ but investors resist
Embattled cryptocurrency exchange FTX wants to quash certain investors' claims for so-called “Sam Coins,” arguing that they should be valued at zero in an ongoing bankruptcy case.
In a March 26 court hearing, lawyers representing FTX asked Delaware bankruptcy judge John Dorsey to heavily discount customer claims for a handful of digital tokens closely linked to jailed FTX founder Sam “SBF” Bankman-Fried.
FTX attorney Brian Glueckstein said customer claims for the native tokens of travel platform Maps (MAPS), DeFi brokerage Oxygen (OXY), decentralized exchange Serum (SERUM), and hybrid blockchain Boba (BOBA) should be heavily discounted or reduced to zero.
However, the investors valued the tokens they held at hundreds of millions of dollars and presented related calculations in court.
On the other hand, Glueckstein explained that experts hired by FTX had applied careful analysis to the petition date value of the assets to determine a reasonable discount on their value. He said:
“The customers attribute values to claims on digital assets assuming a market that never has and never will exist.”
While FTX’s valuation expert, Sabrina Howell, concluded that because the firm held more than 95% of the OXY and MAP tokens — once closely tied to SBF — it would take decades to liquidate them, creditor attorney Kurt Gwynne argued that the company hired experts to unfairly quote low estimates.
Based on their analysis, FTX asserted claims associated with MAPS and OXY tokens — worth over $600 million at current rates — should be deemed worthless. Meanwhile, claims associated with SERUM tokens — worth $509 million — should be discounted by about 58%.
However, the FTX customers asked for the FTX lawyer’s estimates to be overruled, claiming that the four digital assets in question — the Sam Coins — are still worth more than $1.1 billion in total.
Judge Dorsey said it was difficult to formally quantify the worth of cryptocurrency and described digital assets as having “no inherent value.” He further claimed: “The only value is derived from the trades themselves. As far as I can tell, cryptocurrency trades on sentiment and nothing else.”
He heard arguments from both sides and said he would take the matter under advisement before ruling on how to estimate the value of these disputed crypto assets.
Related: Which tokens could FTX dump on the market?
MAPS is the Solana-based native token for the Alameda-backed Web3 travel platform Maps.me. It has collapsed 98% from its May 2021 all-time high of $2, trading at $0.03 at the time of publication, per CoinGecko data.
OXY is the token for the Solana-based Oxygen DeFi brokerage also backed by Alameda Research, it has also collapsed 98% from ATH, currently trading at $0.08.
SERUM is the token for the FTX-backed decentralized exchange of the same name. It is down 99.5% from its peak and is currently valued at $0.06 per token.
Bankman-Fried was found guilty of seven charges of fraud brought against him by the U.S. government almost a year after the collapse of FTX. The prosecution recently proposed a maximum 50-year sentence, however, his lawyers claim this unfairly casts him as a “depraved super-villain”.
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Additional reporting by Arijit Sarkar.
