FTX Asks For “Sam Coins” To Be Declared Worthless, New Court Docs Reveal

Julia Smith
Last updated: | 2 min read
A gavel rests on a judge's bench in a dimly lit courtroom, with scales of justice in the background, symbolizing the legal proceedings of FTX declaring 'Sam Coins' worthless and the ongoing bankruptcy hearings involving FTX creditors.
FTX attorneys are pushing for several "Sam Coins" to be zeroed in its bankruptcy proceedings - but what does it mean for creditors?

Cryptocurrency exchange FTX is looking to declare its creditors’ “Sam Coins” effectively worthless amidst the company’s lengthy bankruptcy proceedings, court documents from a Tuesday hearing in Delaware show.

FTX Declares “Sam Coins” Worthless

Lawyers for FTX Trading LTD. hired NYU Professor of Finance Sabrina Howell to conduct a valuation analysis on a number of “Sam Coins,” including Serum, Maps, and Oxygen.

According to Howell’s research, Serum’s $509 million in claims should be reduced by nearly 60%, while both Oxygen and Maps should be devalued to zero given that the bankrupt cryptocurrency exchange held nearly 95% of the tokens.

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

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

Lawyers for FTX creditors notably pushed back against the method of Howell’s analysis, with Maps Vault Attorney Jefferey Torosian calling her assessment of the digital assets’ value “illogical.”

Attorney Kurt F. Glynne, who is representing nearly $250 million in claims linked to Oxygen and Maps, further criticized the data presented by FTX attorneys as “fundamentally flawed.”

“Her analysis should be given no weight,” he continued.

The Convoluted Journey of FTX’s Bankruptcy Proceedings

The latest FTX hearing comes just days after U.S. Bankruptcy Judge John Dorsey was ordered to approve the appointment of independent examiner Robert J. Cleary to investigate law firm Sullivan and Cromwell’s potential conflicts of interest in relation to the crypto exchange.

Dorsey’s original February 2023 rejection of an independent examiner in the case was overruled just two months ago by a federal appeals court.

Judge Luis Felipe Restrepo cited the decision’s benefits for the entire cryptocurrency sector, including bringing shady business dealings “under scrutiny” while “alerting potential investors to undisclosed credit risks in other cryptocurrency companies.”

Attorney John J. Ray III, who is spearheading FTX’s bankruptcy efforts as CEO, previously opposed an independent examiner in the case, citing exorbitant costs.

Bankman-Fried was convicted last November on fraud charges for misappropriating over $8 billion worth of customer funds, which prosecutors argued went towards funding the FTX founder’s lavish lifestyle.

Meanwhile, a number of close friends and family of Bankman-Fried have pushed U.S. Judge Lewis A. Kaplan for leniency in the leadup to his scheduled sentencing on March 28 in Manhattan federal court.

Serum was trading at $0.062 as of writing, while Maps and Oxygen were valued at $0.034 and $0.013, respectively.