From Bitcoin touched an all-time high of $68,000 last year, the cryptocurrency market began a steep decline that today puts it below $20,000. And not only digital currency users are affected, but also foreigners. As is the case with Miami Heat.
The current economic outlook is bleak, largely due to the potential bankruptcy of one of the world’s largest “banks”: FTX. The platform led by the controversial Sam Bankman Fried is one of the main sponsors of the NBA franchise and is the name of its stadium: American Airlines Arena was renamed FTX Arena.
In 2019, Miami-Dade County signed an agreement with the exchange through 2040. for a whopping $135 million. According to the Miami Herald, the franchise planned to receive 2 million per season. With the crisis that FTX is going through, it is likely that the agreement will not be lost and that a new sponsor will enter the scene.
The contract signed in 2021 was one of the largest in history and comparable to the Toronto Raptors/Maple Leafs with Scotiabank (639 million over 21 years), the New York Giants/Jets with MetLife (425 to 625 million over 26 years), or the New York Mets with Citi (400 million over 22 years).
“This opportunity is more than putting our name on an iconic building. It’s an opportunity to bring value to the growing and diverse community of Miami and surrounding cities.” Sam Bankman-Fried said then.
What happened to FTX?
Binance, the main exchange in the crypto market, partnered with the expansion of FTX in 2019 and received more than $500 million in FTT, the platform token. After some suspicious and dubious dealings by Bankman-Fried were revealed, Changpeng ZhaoCEO of Binance, has indicated that he will sell his position.
This announcement caused a cascade of reactions: more than $450 million came out of FTX, which could only stop the exodus by banning withdrawals, which goes against the cryptocurrency’s philosophy of freedom. The price of FTT also collapsed and in a week lost 80% of its value.
“Never use a token you have created as collateral. Don’t take out loans if you have a cryptocurrency business. Don’t use the capital ‘effectively’. You have a large inventory. Binance has never used BNB as collateral and we have never taken on debt.” wrote CZ, recommending how to act on SBF.
“Liquidating FTT is just post-exit risk management, learning from LUNA. We gave support before, but we don’t plan to make love after the divorce. We are not against anyone. But we will not support people who push other industry players behind their backs. It is not a move against a competitor. Our industry is at its peak, and every time a project fails publicly, it hurts all users and all platforms.” closed CZ as posted Bitcoin Mexico.
