Sources: Mysten Labs, a blockchain startup founded by ex-Meta crypto executives, is in talks to raise a $200M+ Series B led by FTX Ventures at a $2B valuation
We're not even hiding the web3 scam anymore...it's in the article! Overpay for equity, get cheap tokens, flip to retail. It's an ICO, but with “equity” investors taking on the role of middleman. https://twitter.com/...
Context & Ripple Effects
Mysten Labs came out of Meta's crypto unit with an unusually hot start: its $36M Series A led by Andreessen Horowitz in December 2021 priced the ex-Facebook founding team as the asset. By July 2022 the same team was fielding a $200M+ Series B offer from FTX Ventures at a $2B valuation — a 50x+ step-up in under a year, driven by exchange-affiliated capital rather than product milestones.
The round closed in September as a $300M Series B led by FTX at a $2B+ valuation, with investors receiving equity plus token warrants — the structure critics flagged as an ICO rerouted through equity investors. Two months later FTX collapsed, and the SEC's subsequent disclosure that FTX put $100M of customer funds into Mysten Labs retroactively changed what this round was.
First-order effects
- Mysten Labs secures a nine-figure war chest for Sui development at a $2B+ valuation, with FTX Ventures — running a $2B fund after absorbing Alameda Research's VC operations — as lead investor holding both equity and token warrants.
- FTX Ventures extends its position as crypto's most aggressive corporate investor, adding Mysten to a portfolio spanning dozens of rounds totaling roughly $3B deployed.
Second-order effects
- The equity-plus-token-warrant structure gives FTX cheap tokens alongside its equity stake, letting the exchange intermediate retail exposure to Sui — pricing power shifts toward whoever controls both the cap table and the listing venue.
- Rival exchanges and crypto-native funds must match FTX Ventures' cheque sizes and warrant sweeteners to stay in contention for top-tier infrastructure deals like Movement Labs' later $100M Series B at a ~$3B valuation.
Third-order effects
- When the SEC confirmed part of FTX's Mysten investment came from customer funds, exchange-affiliated venture arms became a regulatory fault line: the model of exchanges recycling deposits into startup cap tables faces scrutiny that could force separation between trading venues and their investment arms.
- If the pattern holds, blockchain infrastructure valuations decouple from usage and track instead the balance sheets of a handful of exchange-linked funds — concentrating the sector's capital formation in entities whose solvency is itself untested.
The trend: Crypto infrastructure funding is being repriced by exchange-affiliated venture capital whose own funding source — and legitimacy — is now the central question.