FTX defends the zero value of its SBF-linked tokens in court.
Key Takeaways
- FTX is seeking a zero valuation for the cryptocurrency linked to Sam Bankman-Fried in bankruptcy court.
- The company’s valuation expert supports the push for a zero valuation, arguing that FTX’s controlling ownership would make liquidating its assets nearly impossible.
- Despite FTX’s stance, affected token holders are contesting the proposed devaluation.
At the March 26 court meeting, FTX representatives proposed the following to Delaware Bankruptcy Court Judge John Dorsey: The specific cryptocurrency linked to founder Sam Bankman-Fried has no real value.
FTX’s attorney, Brian Glueckstein, was specifically targeted. MAPS, Oxygen (OXY), Serum (SRM), BOBA, etc. are also called ‘Sam Coin’. We suggest that the value of these digital assets should be greatly devalued or reduced to zero.
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Glueckstein argued: The valuation of these tokens is rooted in a virtual market. Therefore, it is unrealistic.
His argument was based on analysis by Sabrina Howell, a valuation expert at FTX. Howell noted: The company holds more than 95% of the maximum supply of OXY and MAP tokens, which is expected to take decades to liquidate. This formed the basis for the defense that the claims on these tokens, worth more than $600 million, were worthless.
similarly, claim of SRM Token, It amounts to $590 million, A 58% devaluation was recommended.
but, These “Sam Coin” holders refuted FTX’s valuation. Their combined value is claimed to exceed $1.1 billion.
Judge Dorsey No decision has yet been made on the matter, It reflects the arguments of both sides. that dealt with Inherent Complexity of Cryptocurrency Valuation And he said:
The only value is derived from the transaction itself. As far as I know, cryptocurrencies are traded based on emotions and nothing else.
Sam Bankman-Fried, who once led FTX, could face 50 years in prison after being found guilty on multiple fraud charges. His legal team argued that this characterization was overly harsh and requested a reduced sentence. The sentencing date is March 28.
The debate over the valuation of a cryptocurrency closely linked to its disgraced founder while FTX is undergoing bankruptcy proceedings highlights broader challenges to valuing digital assets.
With a master’s degree in Economics, Politics, and Culture in East Asia, Aaron wrote a scientific thesis analyzing the differences between Western capitalism and collective capitalism after World War II.
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