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 agreement to acquire the company at a $60 billion valuation. The significant increase in value has brought attention to the crypto aspect of the deal, as Alameda Research, founded by Sam Bankman-Fried, initially invested $200,000 in Anysphere, the company behind Cursor, in April 2022. This investment represented roughly 5% of the company at a $4 million valuation.
However, after FTX's collapse, the court-appointed estate sold the Cursor stake for the same $200,000, resulting in a substantial loss of potential recovery for creditors. The timing of the sale has raised questions about FTX's bankruptcy administration, particularly given Bankman-Fried's arguments that the estate destroyed billions in value by liquidating assets too quickly. The Cursor stake's valuation increase represents a 15,000x return, which could have been realized by the creditors if the estate had held the position instead of selling it. The incident has sparked debate about the handling of FTX's assets during the bankruptcy process and the potential consequences of forced selling.
As FTX customers have been made whole in dollar terms under the bankruptcy's distribution plan, the focus has shifted to the upside from assets sold during the bankruptcy filing, with the Cursor stake representing about $3 billion of forgone recovery.