The subsidiary of market maker Jump Trading, Tai Mo Shan, has filed a lawsuit against the hedge fund Alameda Research, associated with the bankrupt crypto exchange FTX, demanding the return of $264 million. This lawsuit is related to an unfulfilled promise to provide a loan in the form of native tokens of the decentralized exchange (DEX) Serum (SRM), which operates on the Solana blockchain.
Details and Background of the Lawsuit
In the fall of 2020, Jump Trading, a major player in the financial markets, announced significant investments in Serum, becoming its partner and market maker. However, shortly after the collapse of FTX and its affiliated company Alameda Research in November 2022, Serum also faced a crisis and had to shut down. On November 29, 2022, the Serum team confirmed the closure of the project, citing serious difficulties due to the collapse of FTX, although a network fork was being considered.
Claims and Loss Assessment
In its lawsuit, Tai Mo Shan claims that Alameda Research owes over $264 million for 800 million SRM tokens, which is more than 80% of the maximum token supply and significantly exceeds the circulating supply of 373 million dollars.
The amount of the lawsuit was determined based on the market price of SRM at the time of the bankruptcy filing, as well as considering the strike price, implied volatility of the token, and loan interest rate. In September 2021, the price of SRM reached record highs above $12.5 with trading volumes of $1.2 billion. Currently, the price of SRM has fallen to $0.03, representing a 4% decrease in 24 hours. The market capitalization of SRM now stands at $11.6 million, and the token is ranked 1225th in the overall cryptocurrency rankings.
Dispute and Potential Consequences
FTX lawyers have challenged the lawsuit, stating that the loan was not provided, and speculating that Tai Mo Shan may be involved in fraudulent operations. This legal battle could have significant consequences for all parties involved, considering the scale of the amounts and the impact of the collapse on financial and cryptocurrency markets.
Conclusion and Current Events
This lawsuit is just one of many consequences of the FTX collapse and its related structures. Last month, the crypto investment platform Yield App also announced its closure due to FTX’s bankruptcy. These events highlight the instability and risks in the world of cryptocurrencies, where the collapse of a major player can have far-reaching consequences for the entire ecosystem.
