Signage for the FTX Arena, where the Miami Heat basketball team plays, is lit up Saturday. The rapid collapse of cryptocurrency exchange FTX to bankruptcy has prompted arena owner Miami-Dade County to put a pause on the naming deal with FTX.
In the wake of FTX’s demise, Miami-Dade County wants the now-defunct cryptocurrency exchange company’s logo removed from the sports arena where the NBA’s Miami Heat play their home games.
The county, which owns the arena, has asked a federal judge to immediately end the 19-year, $135 million naming deal with FTX, in a motion filed Tuesday in Delaware District Court where the bankruptcy proceedings of FTX takes place. Miami-Dade argued that continuing with the deal with the failed company would create “considerable hardship” for the county and hurt efforts to find a new arena sponsor.
FTX founder Sam Bankman-Fried and company are under investigation by the Justice Department and Securities and Exchange Commission for allegedly mishandling client money, most of which went to Bankman-Fried’s hedge fund, Alameda Research may have disappeared
After FTX filed for bankruptcy protection on Nov. 11, a judge issued a “stay” order that prevented any entity from taking action against the company, including the intended termination of Miami-Dade’s sponsorship deal.
The hearing of the case is set for December 16. Unless the court grants the county an exemption from the stay order, Miami-Dade and the Heat remain stuck in the deal, which began last year.
FTX has already paid Miami-Dade nearly $20 million, with another $5.5 million due in January. Under the terms of the deal, the company must pay the province for three years if FTX defaults. That adds up to the $17 million the county is seeking in damages, according to the county court.
The corporate logo still adorns the building, Heat’s basketball court, and the team’s jerseys. For months, an ad featuring longtime Heat player Udonis Haslem promoting the crypto company has been running on local game broadcasts.
Under Bankman-Fried, the Bahamas-based FTX quickly became the third-largest cryptocurrency exchange and was recently valued at around $30 billion. Good branding and press helped transform the 30-year-old entrepreneur into a promising leader who could bring legitimacy to a largely obscure and unregulated industry.
According to Decrypt, the Miami Heat deal was one of several sports sponsorship deals signed by FTX. In 2021 alone, the crypto company exported Major League Baseball, the Golden State Warriors and NBA’s Washington Wizards, the NHL’s Washington Capitals and the giant TSM.
In an interview with a cryptocurrency news outlet that year, then-CEO Bankman-Fried was asked how his two-year-old company had the long-term stability it needed to honor its nearly 20-year deal.
“Without going into details, it’s been a great year for us,” said Bankman-Fried. “To the point where, frankly, we don’t have to rely on another 18 years to get funding for this.”
A year and a half later, his company owes creditors more than $3 billion as the new leadership struggles to make amends for the disappearance of an undisclosed amount of customer money.