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SRM was originally scheduled to have a maximum supply of nearly 10.1 billion tokens, but the DEX’s collapse ruined the plans.
Tai Ho Shan, a subsidiary of Jump Trading, seeks to claw reimbursement from the FTX bankruptcy estate, alleging that Alameda Research failed to provide 800 million Serum (SRM) tokens, as per a previous loan agreement. The subsidiary seeks $264 million in damages. On the other hand, the FTX estate argues that the loan agreement was never started, and thus the claim is void.
As the native token of the decentralized exchange (DEX), Serum, SRM attracted major investment from Jump Trading in 2020. The trading firm also said that it would provide market-making services for the token. However, following FTX’s November 2022 bankruptcy, Serum collapsed as well. Insiders told CoinDesk at the time that the exchange received orders from Alameda and was decentralized in name only.
The 800 million tokens would make up 80% of SRM’s current total supply of roughly 1 billion tokens, as compared to the 263 million SRM tokens that are currently in circulation. SRM was originally scheduled to have a maximum supply of nearly 10.1 billion tokens, but the DEX’s collapse ruined the plans.
SRM is currently priced at $0.03095, 3.34% down in the last 24 hours, while the token reached an all-time high of $13.72 in September 2021.
Tai Ho Shan used an options model that considered the market price of SRM on the bankruptcy filing date, the payback option price, SRM’s implied volatility, and the loan interest rate to ask for $264 million in damages. However, the FTX-Alameda bankruptcy estate questions both the foundation of the model and its assessment.
The estate questions the assessment offered by Jump Trading, calling Tai Ho Shan’s damage estimate “wholly unsupportable” and grounded on a faulty “options model”. However, the FTX bankruptcy estate failed to produce their own documentation for slamming Tai Ho Shan’s damage claims.
FTX Estate Dismisses the Damage Claim
According to court records, the FTX-Alameda estate contends that Alameda failed to provide the SRM tokens as agreed upon, therefore rendering the loan arrangement void. The estate said:
“Alameda clearly neglected to provide the Master Loan Agreement the cryptocurrency expected based on the Loan Confirmation. Consequently, the lawyers of the estate said, the loan did not start. They further clarified that the Master Loan Agreement provides just one fix for this: voiding the relevant Loan Confirmation.”
Apart from contesting the legitimacy of the loan demand, the FTX-Alameda estate claims Tai Mo Shan may have conducted fraudulent transfers. The court papers said:
“For the reasons stated here and more following discovery, Tai Mo Shan may be liable to the Debtors for fraudulent transfers.”
The estate claims that the Jump Trading subsidiary “may have been the recipient of certain constructively fraudulent transfers…including the purported loan at issue here,” adding that the wording of the Master Loan Agreement and Loan Confirmation, which said Tai Mo Shan would get 800 million SRM tokens without any interest or fee, is dubious.
