Jump Trading’s subsidiary, Tai Ho Shan, is claiming that the FTX estate owes them $264 million over a loan involving 800 million SRM tokens that Alameda failed to deliver. However, the FTX bankruptcy estate is disputing this claim, stating that the loan was never initiated in the first place.
SRM tokens were the native tokens of the decentralized exchange Serum. Jump Trading had invested heavily in Serum and was providing market making services. Unfortunately, the DEX collapsed after FTX went bankrupt in 2022, revealing that the exchange was not as decentralized as it claimed to be.
The 800 million SRM tokens in question would make up a significant portion of the total existing supply, surpassing the current circulating supply. These tokens were meant to have a maximum supply of over 10.1 billion before the demise of the exchange.
Jump Trading is seeking damages of $264 million based on an options model that factors in the market price of SRM, repayment option price, implied volatility, and interest rate. SRM had seen a peak value in 2021 but has since drastically dropped in value.
Lawyers for the FTX estate argue that the loan agreement was never fulfilled because Alameda did not deliver the specified SRM tokens. They claim that the valuation presented by Jump Trading is not supported and may be based on a flawed model. Furthermore, they suggest that Jump Trading could be liable for fraudulent transfers.
The estate questions the lack of collateral or consideration specified in the loan agreement, raising doubts about the validity of the claim. The legal battle between Jump Trading and the FTX estate is ongoing, with both parties presenting their arguments in court.
As the case unfolds, it sheds light on the complexities of cryptocurrency transactions and the challenges of enforcing agreements in the digital asset space. The outcome of this lawsuit could have implications for future disputes involving cryptocurrency loans and investments, setting a precedent for legal proceedings in the industry.