U.S. county concerned, FTX may lose naming rights

Crypto Regulation
U.S. county concerned, FTX may lose naming rights

If FTX is unable to uphold a contract with Miami-Dade County to pay $135 million over 19 years, the name of the Miami Heat’s arena may change earlier than anticipated.

FTX Arena, Miami and FTX relations in jeopardy 

The name rights contract for the county was signed in 2021 by billionaire Sam Bankman-Fried. In 2019, he established FTX, which later developed to become the third-largest cryptocurrency exchange in the sector.

In January 2022, county commissioners designated a portion of FTX’s $5.5 million yearly contribution for community programming. This month, FTX found itself suddenly in need of assistance.

FTX requested our assistance. The CEO of Binance, a more potent rival to FTX, Changpeng Zhao, tweeted on Tuesday that there is a serious liquidity crisis.

After many customers withdrew their funds from FTX out of concern that it might go out of business soon, Binance initially planned to buy the business on Tuesday but withdrew after reviewing the financial records.

FTX under scrutiny

Bankman-Fried revealed on Thursday that FTX customers could transfer various cryptocurrencies via the Tron Credit Facility, initially up to around $13 million in assets.

“We hope that this is just the first step in our efforts to bring liquidity to users. That is the main issue I am currently fighting for and will keep doing so in whatever manner I can,” Bankman-Fried tweeted.

According to the Wall Street Journal, Bankman-Fried requested $8 billion from his investors on Wednesday.

According to the Associated Press, Binance discovered Bankman-Fried utilized FTX’s custodial funds to support investments by his trading firm, Alameda Research, and FTX was the focus of SEC and Department of Justice inquiries.

Could FTX be headed for bankruptcy?

According to the CEO of FTX, the cryptocurrency exchange could run out of money by up to $8 billion and needs $4 billion to stay afloat. The 30-year-old CEO expressed his regret on Twitter, writing: 

“I’m sorry. The major issue is that. I messed up and ought to have performed better.” 

He added that the US-based exchange, FTX.US, is entirely liquid and won’t be affected by the upheaval.

Recently, Sam Bankman-Fried’s exchange was hailed as the industry’s savior after it bought faltering firms including Celsius Network and Voyager. The cryptocurrency exchange is currently in danger of failing, though.

Numerous enormous financial institutions, like BlackRock and the Ontario Teachers’ Pension Plan Board, made investments in FTX. These asset managers might be impacted by the collapse of FTX.

Sequoia Capital has written down to zero its over $210 million investment in bitcoin exchange FTX due to concerns about bankruptcy.

According to a report, FTX contacted Kraken as a potential rescue partner. Customers and investors can end up with nothing if FTX can’t keep up. The native token FTT currency has decreased to $3.40 amid the upheaval, a drop of over 85% over the past week.

Customers and investors can end up with nothing if FTX can’t keep up. The native token FTT currency has decreased to $3.40 amid the upheaval, a drop of over 85% over the past week.

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Julius Mutunkei

Julius is a blockchain reporter skilled at synthesizing all crypto-related information to make articulate texts easy for anyone to grasp. With a beginner's level certificate in Financial Analysis, Julius can read, interpret and report crypto findings to help investors exercise the best judgment in their decision-making process. When he is not caught up in the crypto frenzy, Julius likes playing a game of FIFA with his online buddies.