FTX debtors agree to $95M sale of stake in Mysten Labs

The debtors for defunct crypto exchange FTX have approved an agreement that would sell its preferred stock in Mysten Labs, the company behind the Sui blockchain.

In a March 22 filing in the United States Bankruptcy Court in the District of Delaware, FTX debtors proposed a deal in which Mysten Labs and the company would agree to a mutual release of claims. As part of the agreement, the debtors planned to sell roughly $95 million worth of preferred stock back to Mysten in addition to $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.”

The deal is seemingly subject to court approval as well as the possibility of other bids on the stock before being finalized. FTX Ventures acquired the stock as part of a $300 million funding round with Mysten announced in September 2022. The investment also came prior to FTX filing for Chapter 11 bankruptcy in November.

Debtors in the FTX bankruptcy case also announced on March 22 that they planned to recover $460 million of user funds from venture capital firm Modulo Capital. The filing alleged the investment from Alameda Research was at the direction of former FTX CEO Sam Bankman-Fried and a misappropriation of funds. Bankman-Fried faces multiple counts in federal court related to alleged fraud during his time as CEO and has pled not guilty to all charges.

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