- The application before the Delaware judge aims to set a precedent on the valuation of digital assets in bankruptcies.
- Holders of ‘Sam Coins’ are defending their value, facing FTX’s proposal for full devaluation in court.
FTX seeks to zero out customer claims for cryptocurrency linked to SBF in bankruptcy proceedings. Lawyers argue that the value of tokens such as MAPS, OXY, SERUM and BOBA should be considered non-existent or zero.
In a filing with Delaware bankruptcy judge John Dorsey, FTX’s legal representatives asked to devalue customers’ claims on MAPS, OXY, SERUM and BOBA tokens.
The legal team representing FTX has made a case that the customer claims involving cryptocurrencies associated with SBF ought to be heavily reduced or considered of no value, given the unique situation these tokens are in.
Their plea to nullify the investors’ claims on the so-called ‘Sam Coins’ within the framework of the bankruptcy proceedings hinges on the premise that these tokens’ worth should be brought down to nothing, as advocated by their attorneys. This plea was presented in a legal session on March 26, under the guidance of Brian Glueckstein, an attorney for FTX, to the bankruptcy judge in Delaware.
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FTX’s effort to devalue or diminish the claims of customers regarding cryptocurrencies connected to SBF in the bankruptcy proceedings might carry considerable consequences for the stakeholders and establish a benchmark for future incidents in the crypto sector.
FTX’s legal team has proposed that claims on certain cryptocurrencies associated with Sam Bankman-Fried, commonly referred to as ‘Sam Coins’, should be heavily discounted or valued at zero in the ongoing bankruptcy proceedings.
These tokens include MAPS, OXY, SERUM and BOBA. The basis of the argument is that the market for these tokens is non-existent and liquidating them would take decades due to the extensive FTX holdings.
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Sabrina Howell, responsible for the exchange’s asset appraisal, stated that the impossibility of selling the OXY and MAP tokens at their present worth, given the company’s ownership exceeds 95% of these tokens, supports the view that the claims linked to MAPS and OXY tokens, with an estimated value exceeding $600 million, ought to be deemed valueless.
In a similar vein, the valuation of claims related to SERUM tokens, pegged at $509 million, should undergo a reduction of around 58%.
However, customers holding these tokens have challenged this valuation, arguing that the digital assets still possess significant value, totaling more than $1.1 billion.
The judge in charge of the case, John Dorsey, acknowledged the difficulty of quantifying the value of the cryptocurrency, noting that its value is derived from exchanges and sentiment. A ruling on how to estimate the value of these disputed assets is expected.
