In April 2023, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000, a move that has proven to be a costly mistake in hindsight. Following SpaceX's agreement to acquire Cursor at a $60 billion valuation, the stake would now be worth approximately $3 billion. This significant disparity has sparked debate about the handling of FTX's assets during its bankruptcy proceedings. The initial investment in Cursor was made by Alameda Research, a trading firm founded by Sam Bankman-Fried, in April 2022, with a $200,000 investment securing around 5% of the company at a $4 million valuation.
After FTX's collapse, the court-appointed estate sold the Cursor stake for the same $200,000, resulting in a missed opportunity for creditors. The timing of the sale has been criticized, particularly by Bankman-Fried, who argues that the estate's decision to liquidate assets too quickly destroyed billions in value. The Cursor stake's exponential growth, from a $4 million valuation to $60 billion in just three years, is one of the steepest in software startup history.
While FTX customers have been repaid in full, they have not benefited from the significant upside of the assets sold during the bankruptcy process, including the Cursor stake, which represents a $3 billion loss.