As part of the agreement, debtors will sell roughly $95 million worth of preferred stock back to Mysten Labs in addition to $1 million in SUI tokens.
On Thursday, March 23, debtors of the collapsed crypto exchange FTX filed a motion in the bankruptcy court seeking a $95 million stake in the Delaware-based Web3 firm Mysten Labs.
Crypto exchange FTX has been surviving to pay its customers impacted by the collapse of the exchange last year in November 2022. Before it fall, FTX had paid $101 million last year for the preferred shares of Mysten Labs and also led a funding round valuing the Web3 firm at more than $2 billion.
Mysten Labs is a Proof-of-Stake blockchain that runs on an open-source programming language called Move with its native cryptocurrency dubbed SUI tokens. The Web3 platform is slated for a full launch in the second quarter of 2023.
On Thursday, March 22, FTX debtors submitted their filings to the United States Bankruptcy Court in Delaware. As part of the agreement, debtors will sell roughly $95 million worth of preferred stock back to Mysten Labs in addition to $1 million in SUI tokens. The filing notes:
“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 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.”
Deal Subject to Court Approval
FTX’s stake sale in Mysten Labs will be, however, subject to court approval. As per the motion, Mysten Labs sent the offer to reclaim FTX’s stake last week on March 16. This was found to be an “attractive offer which would allow the Debtors to recover a significant amount of the value that the Debtors invested” through FTX.
The offer, however, had a late April expiration date. In another separate correspondence, Mysten Labs also conveyed FTX its “desire to consummate a transaction expeditiously”.
During their March 22 filing, debtors in the FTX case announced that they are planning to recover $460 million of user funds from VC firm Modulo Capital. The filing also alleges that the investment from Alameda Research was on the direction of former FTX CEO Sam Bankman-Fried and the misappropriation of funds.
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