The debt settlement set up in the FTX bankruptcy disputes the claim of Jump Trading subsidiary Tai Mo Shan. While Tai Mo Shan stated that Alameda did not deliver 800 million SRM tokens to them and asked for compensation of 264 million dollars, Alameda argues that this claim is invalid on the grounds that the loan agreement has not started.

SRM was the native token of the decentralized exchange (DEX) Serum. Jump Trading announced a significant investment in Serum in the fall of 2020 and will provide market maker services.

After FTX went bankrupt in November 2022, the DEX also collapsed. Internal sources stated that the exchange is decentralized in name only, as orders come from FTX.

Market data shows that the 800 million SRM tokens in demand account for 80% of the approximately 1 billion SRM in circulation and more than the entire current circulating supply of 372.7 million.

The maximum supply of the token was planned to be 10.1 billion tokens, but this plan was suspended due to the crash in 2022.

Jump Trading argues in court documents that the FTX-Alameda debt settlement owes them more than $264 million in damages based on the option model.

The option model uses several factors, including the market price of the SRM as of the bankruptcy filing date, the call option price, the implied volatility of the SRM, and the loan interest rate.

SRM was once one of the shining stars of the coin community, backed by Sam Bankman-Fried’s former FTX-Alameda and partners. SRM peaked at just over $12.50 in September 2021 and recorded a trading volume of $1.2 billion.

According to the book “Going Infinite”, this almost unprecedented rise in 2021 made stock market employees millionaires. However, this eventually bothered Bankman-Fried. Because he was worried that these newly wealthy employees were not interested in long working hours.

Market data currently shows SRM is worth about 3 cents.

FTX-Alameda debt settlement argues in court documents that the loan agreement was never fulfilled because Alameda did not deliver SRM tokens as directed.

FTX-Alameda debt settlement lawyers said, “It is undisputed that Alameda did not deliver the cryptocurrency contemplated by the Lending Approval to Tai Mo Shan in accordance with the Master Loan Agreement. Therefore, the loan has not started.” he writes. “The Master Loan Agreement provides Tai Mo Shan with only one remedy when a loan fails to commence: to cancel the relevant Lending Approval.”

The debt desk disputes the valuation amount offered by Jump, stating that Tai Mo Shan’s loss calculation was based on a “completely unsupported” and flawed “option model” but did not provide an explanation or documentation to support it.

FTX debt desk lawyers also allege that Tai Mo Shan may have been involved in fraudulent transfers.

“For the reasons set forth herein and upon further discovery, Tai Mo Shan may be liable for fraudulent transfers to debtors,” court filings said. The statement is included. “The debtors consider that Tai Mo Shan may have been the recipient of some unconstructive transfers, including the so-called loan referred to here.”

The lawyers also argue that the Master Loan Agreement and Lending Consent state that Tai Mo Shan will receive 800 million SRM tokens without paying any fees or interest, which is doubtful.

“There is no contractual provision determining the amount of any security or consideration given by Tai Mo Shan for the alleged loan.” they write.

This case highlights the repercussions of FTX’s collapse and the complex relationships in the cryptocurrency market. It is a matter of curiosity how the court will decide in the coming period and how this decision will affect the cryptocurrency market.