FTX Counters $264 Million Claim from Jump Trading in Court

As a seasoned crypto investor who has navigated through numerous market volatilities and complex legal disputes, I find the ongoing FTX-Alameda bankruptcy case intriguing. The latest development involving Tai Mo Shan’s $264 million claim against Alameda Research over an unfulfilled loan agreement is a testament to the unique challenges that come with investing in this space.

As an analyst, I would rephrase it as follows: The FTX-Alameda bankruptcy estate challenges a $264 million claim submitted by Tai Mo Shan, a subsidiary of Jump Trading. According to FTX’s legal team, this claim is questionable since the loan that underpins it did not come to fruition between Alameda Research and Tai Mo Shan.

As an analyst, I’d rephrase Tai Mo Shan’s claim as follows: I, Tai Mo Shan, allege that a loan agreement from August 2020 involving 800 million SRM tokens, the native token of Serum decentralized exchange backed by FTX, was not fulfilled. Regrettably, both Serum and FTX exchanges collapsed in 2022.

Based on the court documents, Jump Trading determined their losses by applying an options methodology. They considered the SRM’s market value at the time of bankruptcy declaration, the token’s volatility indicator, the cost of the repayment option, and additional factors.

As a crypto investor, I understand the ongoing dispute between FTX and Alameda Research. From my perspective, Alameda failed to uphold its end of the deal by not delivering the agreed-upon cryptocurrency. Consequently, according to FTX’s estate lawyers, the loan agreement didn’t start because the crucial element – the delivery of cryptocurrency – was missing.

The Master Loan Agreement clearly states that Tai Mo Shan is prohibited from forcing Alameda to hand over the cryptocurrency or claiming monetary compensation for a nonexistent loan.

FTX’s legal team disagrees with the $264 million damage assessment put forth by Jump Trading, deeming it unfounded. They are particularly critical of Jump’s application of the “options model,” which they find to be ambiguous and inadequately explained. According to FTX, the calculation of damages is faulty since the loan agreement stipulated that the tokens were to be delivered in daily installments commencing on August 1, 2023, rather than being valued based on the price of SRM on the bankruptcy petition date.

Furthermore, FTX contends that Tai Mo Shan may be held accountable for making off with funds through fraudulent transfers, implying this is another reason to dismiss their case. In the court documents, it is stated, “The debtors argue that Tai Mo Shan potentially received certain questionable transfers, including the alleged loan in this matter.”

As a researcher studying the ongoing situation with FTX, I can share that creditors have commenced the process of casting their ballots on a proposed compensation plan for FTX customers regarding the exchange’s liquidation. The deadline for submitting votes is set for August 16. If approved, the exchange hopes to secure final approval for this plan by October this year.

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2024-07-11 15:17