In April 2023, FTX's estate sold a 5% stake in AI coding startup Cursor for $200,000, a move that has become one of the largest missed recoveries in crypto history, given the company's current valuation of $60 billion following SpaceX's acquisition deal. The sale was part of the bankruptcy proceedings of FTX, with the stake initially purchased by Alameda Research, a trading firm founded by Sam Bankman-Fried, for the same amount in April 2022.
At the time of the sale, the company was valued at $4 million, but its valuation has since skyrocketed, with SpaceX agreeing to acquire the company for $60 billion or pay a $10 billion breakup fee if the full acquisition does not proceed. The deal is seen as a strategic move by Elon Musk to close the gap with competitors in the AI coding tools space.
The significant increase in Cursor's valuation has sparked debate about the handling of FTX's assets during its bankruptcy, with Sam Bankman-Fried arguing that the estate destroyed billions in value by liquidating assets too quickly. The case of the Cursor stake, which would be worth $3 billion today, is cited as a prime example of the potential value that could have been realized if the assets had been held rather than sold.
Meanwhile, FTX customers have been made whole in terms of their initial investments, but they have not benefited from the significant upside of the assets, including the Cursor stake, which has resulted in a substantial forgone recovery.