In April 2023, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000, a fraction of its current worth. Following SpaceX's recent agreement to acquire Cursor at a $60 billion valuation, that same stake would now be valued at approximately $3 billion. This significant disparity has brought attention to the crypto aspect of the deal, particularly the investment made by Alameda Research in Anysphere, the company behind Cursor. The initial $200,000 investment, made in April 2022, represented a 5% stake in the company at a $4 million valuation.
However, after FTX's collapse and subsequent bankruptcy, the court-appointed estate sold the stake for the same $200,000, resulting in a substantial loss of potential recovery for creditors. This incident has been cited by Sam Bankman-Fried, currently serving a 25-year federal sentence, as an example of the estate's mishandling of assets, which he claims could have been worth billions if managed differently. The timing of this revelation is particularly awkward for FTX's bankruptcy administration, as it underscores the potential value that could have been realized if assets had been held rather than liquidated. Meanwhile, FTX customers have been made whole in terms of their initial investments, but they have not benefited from the upside of the assets, including the significant increase in value of the Cursor stake.
This example is likely to feature prominently in ongoing discussions about the handling of FTX's assets and the potential for revisiting the case against Bankman-Fried.