New Court Documents Reveal FTX’s Request to Declare “Sam Coins” Worthless

FTX building and court settings

FTX, a cryptocurrency exchange, aims to render its creditors’ “Sam Coins” essentially worthless amid the company’s ongoing bankruptcy proceedings, as revealed in court documents from a Tuesday hearing in Delaware.

FTX Declares “Sam Coins” Worthless

Lawyers representing FTX Trading LTD. enlisted the expertise of Sabrina Howell, a Finance Professor at NYU, to conduct a valuation analysis on various “Sam Coins,” which encompass Serum, Maps, and Oxygen.

Howell’s research indicates that Serum’s $509 million in claims should undergo a reduction of nearly 60%, while both Oxygen and Maps ought to be devalued to zero, considering that the bankrupt cryptocurrency exchange possessed almost 95% of the tokens.

FTX’s attorney, Brian D. Glueckenstein from Sullivan and Cromwell, remarked, “The customers attribute values to claims on digital assets assuming a market that never has and never will exist.”

FTX Creditors Challenge NYU Professor’s “Sam Coins” Analysis

FTX creditors’ attorneys contested Howell’s methodology, with Jefferey Torosian, representing Maps Vault, criticizing her evaluation of the digital assets’ worth as “illogical.”

Attorney Kurt F. Glynne, representing claims amounting to nearly $250 million linked to Oxygen and Maps, further lambasted the data provided by FTX attorneys as “fundamentally flawed,” asserting, “Her analysis should be given no weight.”

The Convoluted Journey of FTX’s Bankruptcy Proceedings

The recent FTX hearing follows closely after U.S. Bankruptcy Judge John Dorsey was instructed to approve the appointment of Robert J. Cleary, an independent examiner, to investigate potential conflicts of interest involving law firm Sullivan and Cromwell concerning the crypto exchange.

Dorsey’s initial rejection of an independent examiner in February 2023 was overturned just two months ago by a federal appeals court, with Judge Luis Felipe Restrepo highlighting the decision’s positive impact on the cryptocurrency sector, including subjecting dubious business dealings to scrutiny and informing potential investors about undisclosed credit risks in other cryptocurrency companies.

CEO John J. Ray III, leading FTX’s bankruptcy efforts, previously opposed an independent examiner, citing excessive costs.

In November, Bankman-Fried, the founder of FTX, was convicted on fraud charges for allegedly misappropriating over $8 billion worth of customer funds, purportedly funding his extravagant lifestyle.

Leading up to Bankman-Fried’s scheduled sentencing on March 28 in Manhattan federal court, several close associates and family members have appealed to U.S. Judge Lewis A. Kaplan for leniency.

As of the latest data, Serum was trading at $0.062, while Maps and Oxygen were valued at $0.034 and $0.013, respectively.

Author: Simeon

Simeon is a seasoned crypto writer with a passion for exploring the fascinating world of blockchain and digital currencies. With a background in finance and technology, Simeon brings a unique perspective to his writing, delving into the complexities of decentralized finance, cryptocurrency trading, and emerging blockchain projects.