In April 2023, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000, a valuation that has since skyrocketed to approximately $3 billion following SpaceX's acquisition agreement at a $60 billion valuation. This significant increase in value has brought attention to the estate's decision to liquidate assets during the bankruptcy process. Elon Musk's SpaceX has agreed to acquire Cursor, with the option to buy the company for $60 billion or pay $10 billion if the full acquisition does not proceed, as part of its efforts to close the gap with competitors in AI coding tools. The deal has been postponed due to SpaceX's planned initial public offering, which targets a $2 trillion valuation.
The crypto aspect of this story involves Alameda Research, founded by Sam Bankman-Fried, which invested $200,000 in Anysphere, the company behind Cursor, in April 2022. This investment represented a 5% stake in 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 this sale has sparked controversy, particularly given Bankman-Fried's arguments that the estate destroyed billions in value by liquidating assets too quickly during the bankruptcy. He has suggested that customers could have been made whole if the process had held positions instead of selling them into what turned out to be the bottom of crypto prices. The value of the Cursor stake has increased by approximately 15,000% since the estate's sale, from $200,000 to $3 billion. This significant increase has raised questions about the estate's handling of assets during the bankruptcy process and the potential consequences for FTX customers, who have since been repaid in dollar terms but did not receive the upside from the assets' subsequent appreciation in value.