Within the wake of FTX’s collapse, Miami-Dade County desires the emblem of the now-bankrupt cryptocurrency alternate firm faraway from its sports activities enviornment, the place the NBA’s Miami Warmth performs its house video games.
The county, which owns the world, requested a federal decide to instantly finish a 19-year, $135 million naming rights cope with FTX, in a movement filed Tuesday with the Delaware court docket the place the FTX chapter proceedings are going down. Miami-Dade argued that persevering with the settlement with the failed firm would trigger “important hardship” for the county and harm efforts to discover a new enviornment sponsor.
FTX founder Sam Bankman-Fried and his firm are underneath investigation by the Division of Justice and the Securities and Trade Fee for allegedly mishandling prospects’ funds, a lot of which can have been funneled to Bankman-Fried’s hedge fund, Alameda Analysis.
After FTX filed for chapter safety on Nov. 11, a decide issued a “keep” order that stops any entity from performing towards the corporate, which incorporates Miami-Dade’s desired termination of its sponsorship settlement.
A listening to for the case is about for Dec. 16. Except the court docket grants the county aid from the keep order, Miami-Dade and the Warmth will stay locked into the deal, which started final yr.
FTX already has paid Miami-Dade nearly $20 million, and has a $5.5 million fee due in January. Beneath the deal’s phrases, a default on FTX’s half would require the corporate to pay the county for 3 years. That quantities to $17 million, which the county is looking for in damages, in keeping with the county’s court docket submitting.
The corporate’s emblem nonetheless decorates the constructing, the Warmth’s basketball court docket and the staff’s jerseys. For months, a industrial that includes longtime Warmth participant Udonis Haslem selling the crypto firm has run on native recreation broadcasts.
Beneath Bankman-Fried, the Bahamas-based FTX rapidly grew to develop into the third-largest cryptocurrency alternate, and not too long ago was valued at some $30 billion. Good branding and press helped forged the 30-year-old entrepreneur as a promising chief who may carry legitimacy to a largely murky and unregulated trade.
The Miami Warmth deal was simply one among a number of sport sponsorship contracts FTX has signed, in keeping with Decrypt. In 2021 alone, the crypto firm had secured offers with Main League Baseball, the Golden State Warriors and the Washington Wizards of the NBA, the Washington Capitals of the NHL, and esports big TSM.
In an interview with the cryptocurency information outlet that yr, then CEO Bankman-Fried was requested how his two-year-old firm had the long-term stability essential to honor a virtually 20-year deal.
“With out going into the small print, it has been a reasonably good yr for us,” Bankman-Fried mentioned. “To the purpose the place, frankly, we needn’t depend on the opposite 18 years to have enough money this.”
A yr and a half later, his firm owes collectors greater than $3 billion, whereas new management struggles to account for the disappearance of an unknown quantity of buyer cash.