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FTX Advocates for Zero Value on Sam Bankman-Fried Linked Tokens in Court

FTX Advocates for Zero Value on Sam Bankman-Fried Linked Tokens in Court

Key Takeaways

  • FTX is pushing for a zero valuation on cryptocurrencies linked to Sam Bankman-Fried in bankruptcy court.
  • The firm's valuation expert argues that due to FTX's dominant ownership, liquidating the assets would be nearly impossible, supporting the push for zero valuation.
  • Despite FTX's stance, holders of the affected tokens dispute the proposed devaluation.

At a court session on March 26, representatives for FTX suggested to Delaware bankruptcy court Judge John Dorsey that certain cryptocurrencies linked to founder Sam Bankman-Fried have no real value.

Brian Glueckstein, an attorney for FTX, specifically targeted Maps (MAPS), Oxygen (OXY), Serum (SRM), and Boba (BOBA), also called "Sam Coins," suggesting these digital assets should either be significantly devalued or dropped to zero.

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Glueckstein argued that the valuation of these tokens is rooted in a hypothetical market and, therefore, is unrealistic.

His argument was based on an analysis by Sabrina Howell, FTX's valuation expert. Howell noted that the company holds more than 95% of the maximum supply of OXY and MAP tokens, suggesting it would take decades to liquidate them. This formed the basis for advocating that the claims of these tokens, valued at over $600 million, have no worth.

Similarly, claims of SRM tokens, amounting to $509 million, were recommended for a 58% devaluation.

However, holders of these "Sam Coins" have countered FTX's valuation, insisting their combined worth exceeds $1.1 billion.

Judge Dorsey has yet to decide on the matter, reflecting on arguments from both sides. He addressed the inherent complexity of crypto valuation and remarked:

The only value is derived from the trades themselves. As far as I can tell, cryptocurrency trades on sentiment and nothing else.

Sam Bankman-Fried, once at the helm of FTX, faces a potential 50-year prison sentence following his conviction on multiple fraud charges. His legal team has contended that this characterization is excessively harsh and has requested a reduced sentence. The sentencing is set for March 28.

As FTX navigates through its bankruptcy proceedings, the debate over the valuation of cryptocurrencies closely tied to its disgraced founder underscores the broader challenges of assessing digital asset worth.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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