FTX Debtors Approve the Sale of Stake in Mysten Labs
- The debtors of bankrupt crypto exchange FTX have decided to sell the stake that the firm has in Mysten Labs, the firm behind Mysten Labs.
- Mysten Labs will return close to $95 million to the debtors, while the exchange will also receive around $1 million in SUI tokens.
- FTX Ventures participated in the $300 million funding round of Mysten Labs in September 2022 prior to its collapse.
- The debtors are also looking to recover close to $460 million of allegedly misappropriated funds from venture capital firm Modulo Capital.
After its fall from grace in 2022 under the leadership of co-founder and CEO Sam Bankman-Fried, bankrupt crypto exchange FTX has tried to repay its debts via the sale of assets and asking politicians to return the donations made by the exchange to US Congressmen. Interestingly, the debtors have decided to sell the stake that the bankrupt crypto exchange has in Mysten Labs, the company responsible for the development of the Sui Blockchain.
According to a filing in the United States Bankruptcy Court in the District of Delaware, the debtors of FTX have proposed a deal to Mysten Labs and the company would agree to a mutual release of claims. Interestingly, the stake which is worth close to $95 million will be given to Mysten Labs while the crypto exchange will receive $95 million along with $1 million in SUI tokens.
“The Debtors carefully considered and analyzed the offer as set forth in the Agreement in comparison to its other options and concluded that a sale of the Interests will result in obtaining maximum value for the Interests, and is in the best interests of the Debtors’ estates and creditors,” the filing says. “The Purchase Price is equal to approximately 95% of the amount FTX Ventures had originally invested in the Preferred Stock of Purchaser-Subject Company, plus 100% of the amount Sellers paid for the SUI Token Warrants.”
Interestingly, FTX Ventures, the venture arm of the crypto exchange, participated in the funding round of Mysten Labs last year and acquired a significant number of shares as well. Now, the debtors aim to liquidate the bankrupt exchange’s assets to create additional liquidity and get their money back. Mysten Labs raised a total of $300 million in the funding round ahead of the launch of the Sui blockchain.
The deal is now subject to court approval, and the details of the bid are being finalized. It is crucial to note that the debtors are also looking to recover close to $460 million of allegedly misappropriated funds from venture capital firm Modulo Capital. The sister trading company of FTX, Alameda Research, had a sizable investment in the venture capital firm last year and now, the debtors aim to claw back the investment.
A March 22 filing claims that the investment from Alameda Research was made on behalf of Bankman-Fried, then known as the white knight of crypto space. The trading company started investing in the VC firm starting May 2022 when the collapse of Terra-LUNA ecosystem shook the world.
Furthermore, it is crucial to note that Modulo will repay $404 million in cash and will give up its claim to $56 million worth of assets held on FTX’s crypto exchange. This represents close to 97% of the bankrupt exchange’s total investment in the venture capital firm.
Also, as reported earlier by Bitnation, Nishad Singh, the former director of engineering at FTX, has agreed to plead guilty to US criminal charges along with other people close to Bankman-Fried.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
