FTX, a cryptocurrency exchange currently facing financial difficulties, is seeking to dismiss claims from investors regarding the value of certain digital tokens known as “Sam Coins” in an ongoing bankruptcy case. During a recent court hearing on March 26, FTX’s legal representatives argued before Delaware bankruptcy judge John Dorsey that customer claims for tokens associated with FTX founder Sam “SBF” Bankman-Fried should be heavily discounted or considered worthless. FTX attorney Brian Glueckstein specifically mentioned the tokens of travel platform Maps (MAPS), DeFi brokerage Oxygen (OXY), decentralized exchange Serum (SERUM), and hybrid blockchain Boba (BOBA). However, the investors countered by valuing their tokens in the hundreds of millions of dollars and presented calculations to support their claims in court.
FTX’s valuation expert, Sabrina Howell, stated that due to the company holding over 95% of the OXY and MAP tokens, which were closely linked to SBF, it would take many years to liquidate them. However, creditor attorney Kurt Gwynne argued that FTX had purposely obtained low estimates by hiring biased experts. FTX asserted that claims associated with MAPS and OXY tokens, which are currently valued at over $600 million, should be considered worthless. Additionally, claims associated with SERUM tokens, valued at $509 million, should be discounted by approximately 58%.
The FTX customers disputed the estimates provided by FTX’s lawyer and claimed that the four digital assets in question, the Sam Coins, are still worth more than $1.1 billion in total. Judge Dorsey acknowledged the difficulty in determining the value of cryptocurrency and described digital assets as having no inherent value. He stated that the only value they possess is derived from trading and sentiment.
After hearing arguments from both sides, Judge Dorsey stated that he would carefully consider the matter before ruling on how to determine the value of the disputed crypto assets.
In related news, FTX’s native token for the Alameda-backed Web3 travel platform Maps.me, called MAPS, has experienced a significant decline of 98% from its all-time high of $2 in May 2021. As of now, it is trading at $0.03. The token for the Oxygen DeFi brokerage, OXY, which is also backed by Alameda Research, has also dropped 98% from its peak and is currently trading at $0.08. Similarly, the token for the FTX-backed decentralized exchange Serum, known as SERUM, has fallen 99.5% from its highest point and is currently valued at $0.06 per token.
It is worth noting that Bankman-Fried, the founder of FTX, was recently found guilty of seven charges of fraud by the U.S. government, nearly a year after FTX’s collapse. The prosecution has recommended a maximum sentence of 50 years, but Bankman-Fried’s lawyers argue that this portrayal is unfair and paints him as a “depraved super-villain.”
As a result of FTX’s troubles, there are growing concerns about the trustworthiness of cryptocurrency exchanges in general.