FTX Pushes To Nullify Value Of 'Sam Coins' Amid Bankruptcy Proceedings

The troubled cryptocurrency exchange FTX is currently pushing to nullify the value of certain tokens tied to its founder, Sam Bankman-Fried, in an ongoing bankruptcy trial. 

What Happened: During a court hearing on March 26, FTX's lawyers asked the bankruptcy judge John Dorsey of Delaware to disregard claims for these tokens, often referred to as ‘Sam Coins’, considering them worthless.

Attorney Brian Glueckstein, representing FTX, argued in court that the claims for specific tokens connected to Bankman-Fried should be significantly devalued. These tokens include the travel platform Maps’s MAPS, DeFi brokerage Oxygen’s OXY, decentralized exchange Serum’s SERUM, and Boba’s BOBA tokens. 

Glueckstein contended that the claimed value of these tokens, based on a hypothetical market, is unrealistic. “The customers attribute values to claims on digital assets assuming a market that never has and never will exist," he stated.

Customers in possession of these tokens are contesting the devaluation proposed by FTX. They claim that these four tokens are valued at over $1.1 billion and are fighting against the exchange’s suggested estimates.

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Why It Matters: During the proceedings, Judge Dorsey remarked on the inherent challenge of valuing cryptocurrency, stating that digital assets have “no inherent value” and that any value they do have “is derived from the trades themselves,” noting that “cryptocurrency trades on sentiment and nothing else." After hearing both parties’ arguments, he announced he would consider the issue before making a ruling on the disputed assets’ valuation.

Currently, the value of tokens linked to Bankman-Fried’s ventures has plummeted according to data from CoinGecko. MAPS has dropped by 98% from its May 2021 peak, trading at $0.03. OXY, associated with the Solana-based Oxygen DeFi brokerage, is down 98%, trading at $0.08. SERUM has witnessed a 99.5% decline from its top value and now sits at $0.06 per token.

The move to depreciate these ‘Sam Coins’ comes as Bankman-Fried faces legal consequences, having been found guilty on seven counts of fraud by U.S. authorities. Nearly a year after FTX collapsed, the defense team for Sam Bankman-Fried has openly criticized the Department of Justice's (DOJ) recent sentencing memorandum, labeling it as unnecessarily harsh and misrepresentative of Bankman-Fried's character.

Last week, in a response letter filed, the team stated, "The memorandum distorts reality to support its precious ‘loss' narrative and casts Sam as a depraved super-villain."

Price Action: At the time of writing, the price of Bitcoin BTC/USD was trading at $70,340, in the last 24 hours.

Photo by Sergei Elagin on Shutterstock

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