By
Bhushan Akolkar
April 26th, 2024
The legal battle over these “SBF Coins” takes place against the backdrop of Sam Bankman-Fried’s legal issues.
The ongoing bankruptcy case of FTX has taken a new turn as lawyers for the firm seek to liquidate certain cryptocurrencies known as “SBF Coins” at a discounted price.
The “SBF Coins” in Contention
The “SBF Coins” have a direct connection to Sam Bankman-Fried, founder and former CEO of the defunct FTX brokerage, who is billed to serve a jail sentence for fraud. The tokens in contention include DeFi brokerage Oxygen (OXY), decentralized exchange Serum (SERUM), the native token of Maps (MAPS), and Boba (BOBA).
Brian Glueckstein, the lawyer for FTX, argued in a court hearing held on Tuesday that these tokens ought to be severely depreciated or declared worthless during the bankruptcy process. The lawyer stressed that FTX’s valuation specialists had carefully examined the assets’ value as of the petition date and came to the conclusion that FTX’s substantial holdings should render customer claims related to MAPS and OXY tokens, totaling more than $600 million, worthless.
On the other hand, the experts noted that claims related to $509 million worth of SERUM tokens should be discounted by roughly 58%. While responding to the experts’ analysis, inventors holding “SBF Coins” highlighted that the digital assets still have value, worth $1.1 billion. Accordingly, they asked the judge to reject FTX’s approximations.
Delaware bankruptcy judge John Dorsey handling the case acknowledged the complexity in quantifying the SBF Coins, stating:
“The only value is derived from the trades themselves. As far as I can tell, cryptocurrency trades on sentiment and nothing else.”
Nonetheless, after hearing arguments from both parties, he declared that he would consider the situation before deciding the value of the disputed cryptocurrencies.
Notably, MAPS, OXY, and SERUM tokens have all seen a substantial decline from their all-time highs. MAPS, the Solana-based cryptocurrency for Maps.me, has dropped 98% from its peak and is now selling at $0.03. OXY, which is affiliated with Oxygen DeFi brokerage, has met a similar fate, plunging 98% and trading at $0.08. SERUM, the token for the FTX-backed decentralized exchange, has dropped 99.5% since its peak and is now worth $0.06.
Unfolding Details on Sam Bankman-Fried’s Case
The legal battle over these “SBF Coins” takes place against the backdrop of Sam Bankman-Fried’s legal issues. Roughly a year after FTX’s demise, Bankman-Fried was convicted of seven fraud charges brought against him by the US government.
The prosecution is asking for a maximum punishment of 50 years in addition to a forfeiture of $11 billion, but Bankman-Fried’s defense team says that would wrongly characterize him as a “depraved super-villain.”
However, victims of the defunct exchange are speaking out, seeking justice. According to a recent report from Coinspeaker, the victims have revealed the harsh realities they suffer, painting a bleak picture of the reality brought forth by SBF and his executives.
Meanwhile, recent court records show FTX agreed to sell two-thirds of its Anthropic holdings for $884 million. The equity worth is more than double what Bankman-Fried paid for it and will help free up funds for to repay creditors.