FTX Crypto Creditors Demand Justice: The Battle for ‘Sam Coins’ Valuation in Bankruptcy Saga

Key Points:

• FTX crypto creditors demand payouts for “Sam Coins” linked to fraudster Sam Bankman-Fried.
• A legal battle ensues over the valuation of tokens in federal court.
• Former FTX clients may receive full asset recovery amidst a $6.4 billion cash reserve.

According to Bloomberg, a group of FTX customers is pressing for significant payouts from the bankrupt cryptocurrency firm, asserting that three digital tokens dubbed “Sam Coins” merit compensation despite their ties to convicted fraudster Sam Bankman-Fried.

FTX Crypto Creditors Seek Compensation for “Sam Coins” Amid Bankruptcy

FTX crypto creditors holding tokens called Serum, MAPS, and OXY are urging US Bankruptcy Judge John Dorsey to mandate FTX to increase the tokens’ value, disputing the company’s assessment that they are essentially worthless. Bankman-Fried, before relinquishing control of FTX, spearheaded Serum’s creation and orchestrated arrangements for the other two tokens.

Dubbed “Sam Coins” due to their close association with Bankman-Fried, these tokens allegedly played a pivotal role in the fraudulent scheme, according to bankruptcy officials.

Scheduled for Tuesday, the customers and the company are set to deliver their final arguments in federal court in Wilmington, Delaware.

FTX’s bankruptcy filing in November 2022 revealed the company held over 95% of all tokens, an excess deemed unmarketable even without the associated fraud. Company advisors propose that the tokens are worth only nominal sums.

Asset Recovery Prospects for Former FTX Clients Amidst Fraud Controversy

FTX crypto creditors contest this evaluation, presenting their valuation method in court on Monday, insisting the tokens should be valued in the hundreds of millions. They’ve filed claims demanding compensation based on their calculations.

FTX anticipates returning 100% of its assets to other former customers who invested in US dollars, Bitcoin, and other viable assets, estimating its cash reserves at $6.4 billion.

Last year, Bankman-Fried was convicted of fraud for misappropriating customer assets, channeling them to a hedge fund for high-risk investments, political contributions, and luxury real estate, precipitating FTX’s downfall.