The FTX chapter property is contesting a $264 million declare made by Bounce Buying and selling’s subsidiary, Tai Mo Shan, relating to an undelivered mortgage of 800 million Serum (SRM) tokens from Alameda Analysis.
Alameda Analysis did not ship the 800 million SRM tokens as stipulated within the mortgage settlement. This failure is central to the dispute, as FTX attorneys argue that the mortgage by no means commenced as a result of the tokens weren’t delivered.
The authorized battle is a major growth within the ongoing efforts to resolve the monetary fallout from FTX’s collapse.
Serum mortgage
The dispute facilities round a mortgage settlement involving Alameda Analysis, which was presupposed to ship 800 million Serum (SRM) tokens to Bounce Buying and selling’s subsidiary, Tai Mo Shan.
This settlement was half of a bigger technique to help the decentralized alternate (DEX) Serum, which was closely backed by FTX. Bounce Buying and selling made a considerable funding in Serum within the fall of 2020, providing market-making providers.
Nevertheless, the DEX collapsed following FTX’s chapter in November 2022, revealing that regardless of its decentralized claims, it was successfully managed by the defunct alternate. The mortgage was slated to begin in 2023 and by no means materialized as a consequence of FTX’s collapse.
Tai Mo Shan asserts that the agency’s failure to ship these tokens warrants $264 million in damages, which the alternate is responsible for. Nevertheless, FTX attorneys counter that since Alameda didn’t ship the SRM tokens, the mortgage settlement is void underneath the Grasp Mortgage Settlement, which permits for nullification if a mortgage doesn’t begin.
Based on FTX’s authorized group:
“It’s undisputed that Alameda did not ship the cryptocurrency contemplated by the Mortgage Affirmation to the Grasp Mortgage Settlement. The mortgage, due to this fact, didn’t begin.”
FTX’s authorized group additionally advised that the phrases of the mortgage settlement, which concerned offering 800 million SRM tokens with none payment or curiosity, may suggest fraudulent transfers. They point out that additional discovery could reveal extra about these potential fraudulent transfers.
The courtroom filings state:
“For the explanations said right here and extra following discovery, Tai Mo Shan could also be liable to the Debtors for fraudulent transfers.”
Circulating provide lower than mortgage
The 800 million SRM tokens in query symbolize about 80% of the whole SRM provide, considerably greater than the 372.7 million presently in circulation.
SRM was one of many distinguished tokens backed by FTX and Alameda Analysis. It peaked at simply over $12.50 in September 2021, with a buying and selling quantity of $1.2 billion. As of press time, SRM is price roughly 3 cents.
Bounce Buying and selling’s declare for $264 million in damages relies on an choices mannequin that considers the market value of SRM on the time of the chapter submitting, the reimbursement choice value, SRM’s implied volatility, and the mortgage’s rate of interest.
FTX attorneys challenged the valuation and stated it was “wholly unsupportable.” They criticized the choices mannequin used for calculation as flawed and missing clear documentation.
