In April 2023, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000, a decision that has become one of the largest missed recoveries in crypto history. Following SpaceX's agreement to acquire Cursor at a $60 billion valuation, that same stake would be worth approximately $3 billion today. This deal marks a significant move by Elon Musk to close the gap with competitors in the AI coding tools space. The crypto aspect of this transaction lies in the fact that Alameda Research, a trading firm founded by Sam Bankman-Fried, invested $200,000 in Anysphere, the company behind Cursor, in April 2022.
This investment bought roughly 5% of the company at a $4 million valuation. However, after FTX collapsed, the court-appointed estate sold the Cursor stake for the same $200,000, resulting in a missed opportunity for creditors. The timing of this sale has raised questions about the handling of FTX's assets during the bankruptcy process. Bankman-Fried has argued that the estate's decision to liquidate assets too quickly destroyed billions in value, and the Cursor stake is a prime example of this.
The company's rapid growth since the launch of its AI coding product in 2023 has been among the steepest in software startup history. While FTX customers have been repaid in full, they have not benefited from the upside of the assets sold during the bankruptcy process, including the significant increase in value of the Cursor stake.