How FTX Missed a Potential $1 Billion Windfall From SUI Due to Bankruptcy

Bankrupt crypto exchange FTX missed the potential to own billions of dollars worth of SUI tokens after it sold its warrant rights to the native token of the nearly launched layer-1 blockchain too early.

Following the much-anticipated launch of the Sui mainnet, the price of the SUI token rose to over $3 before dropping in value. At SUI’s current price, FTX’s SUI tokens would have been worth around $1 billion.

FTX Loses out on Gains on SUI After Selling its Token Warrants

FTX’s management lost the opportunity for a potential $1 billion payday by selling 890 million SUI token warrants. A token warrant gives an investor the right to have assets that would be released in the future. In FTX’s case, the crypto exchange’s token warrants allowed the company to get 890,000,000 SUI upon launch.

In 2022, FTX Ventures, the venture capital arm of the bankrupt crypto exchange FTX, led Mysten Labs’ Series B funding round. Mysten Labs, the developer of the Sui blockchain, raised $300 million at a valuation of $2 billion. Other well-known participants in the round included Binance, Coinbase, and Circle.

Part of the investment from FTX saw the purchase of equity stakes in Mysten Labs worth $101 million and warrant rights to purchase over 800 million SUI tokens worth $1 million. However, in March 2023, FTX announced intentions to sell back its stake in Mysten Labs as well as SUI token warrant rights.

The repurchase deal was completed in April for $96 million, slightly less than the amount FTX paid. The transaction was part of the crypto exchange’s bankruptcy proceedings.

But FTX’s sale may have happened a little too early. On May 3, 2023, the Sui mainnet went live, with the SUI token trading at a peak of over $3.5 a few minutes after launch, according to CoinGecko. While the price of the token has fallen a lot to trade at $1.33 at the of writing, FTX’s 890 million SUI tokens would have been worth over $1 billion, which would have meant more money for the company.

Sui Blockchain’s Throughput Rate Peaks at Nearly 300,000 TPS

Sui network is a layer-1 blockchain that utilizes the proof-of-stake (PoS) mechanism and boasts of increased speed and scalability. According to a performance update in April 2023, the Sui network achieved a high throughput rate of 297,000 transactions per second (TPS) with 100 validators while also recording an average time to finality of less than half a second.

The SUI token has a market cap of over $700 million, putting the coin among the top 100 tokens. Also, fully diluted valuation (FDV) currently stands at $13.3 billion, while circulating supply is over 528 million, 5.28% of the maximum total supply of 10 billion.