By
Chimamanda U. Martha
April 19th, 2024
Naming rights have been a popular initiative for crypto firms before the commencement of the crypto winter of 2022.
FTX Arena is a thing of the past. As the crypto industry is slowly coming to terms with the massive fall of crypto exchange platform FTX, a judge from Florida declined FTX its naming rights to the home of the Miami Heat on Wednesday.
The news follows a court verdict in the Bankruptcy Court of Delaware, where the lawyers argued that the funds from Alameda Research sponsored the deal with Miami-Dade county. The county had already obtained approval to remove FTX signage after the exchange directive for Chapter 11 bankruptcy safekeeping last November.
The order on Wednesday confirmed the parties’ division and enable the owners of the Miami Heat arena to search for newer collaborations on the enterprise. According to Legal Analyst David Weinstein, while monetary compensation will be provided to redeem the money lost under the contract, this is one of those scenarios where collaborations end up slashing ties and moving on.
According to Weinstein, Miami-Dade will however, have to decide on what the county will do with the money accepted by FTX in the deal, or alternatively, return the money over to bankruptcy court reviewing the FTX case. The court will then examine how Miami-Dade received the money, and if they were conned like any other investor in this case.
The two-hundred and thirteen million, eighteen thousand seating capacity which was inaugurated in 1999 as American Airlines Arena, was signed in for a nineteen-year contract by FTX CEO Sam Bankman-Fried with Miami-Dade, the arena’s owners. This was done for a cumulative naming rights deal of $135 million which would have paid the county $2 million every year.
The deal had also been an eyebrow-raiser for the crypto industry, since not only was the amount large, but also that FTX had only been 2 years old at that time.
FTX collapsed from being a multibillion-dollar company to a bankruptcy story within weeks. The number of FTX investors and customers who lost a total amount of $8 billion is most likely to go over 1 million. FTX co-founder and CEO Sam Bankman Fried was charged last month in an eight-count indictment with defrauding clients of and lenders to the crypto exchange. He has also been charged with defrauding lenders to his privately-controlled hedge fund Alameda Research.
Naming rights have been a popular initiative for crypto firms before the commencement of the crypto winter of 2022. In November 2021, Crypto.com, which was also a competitor cryptocurrency exchange signed a deal for $700 million with the owners of the then Staples Center, the home of the Los Angeles Lakers and Clippers.