The Miami Heat, a professional basketball team based in Miami, announced on November 10 that it may change its naming rights agreement with FTX.
The $135 million deal was sealed in 2021, two years after the exchange’s launch. Samuel Bankman Fried, the CEO, signed the deal with Miami Dade County, which involves paying over 19 years.
The deal would give FTX Exchange naming rights over the new home of the Miami Heat. However, as it stands, the agreement could change if FTX fails to meet the required quota.
When FTX CEO Samuel Bankman Fried signed the deal, the exchange was the third largest in the industry.
But currently, FTX is nowhere among the top as an alleged lawsuit has dragged the price of FTT, its native token, below $3, and its rank in the crypto market has dropped from among the top ten to 83rd in a few days.
Several investors have withdrawn from the platform and sold their stakes; among them is Changpeng Zhao, who not only sold his stakes a year earlier but has liquidated all his FTX tokens worth $500 million.
Others followed suit after seeing CZ’s actions; this created paranoia that made most users sell their tokens.
However, on November 8, the platform froze all withdrawals, and the following day, all related websites became inaccessible.
The exchange resumed withdrawals in the Bahamas on November 10, and in a few hours, they recorded $6.8 million in withdrawals.
All this chain of events points to the fact that the FTX exchange may be out of liquidity and still owes a projected sum of $9 billion in customer funds.
FTX Exchange and its sister company, Alameda Research, were accused of misusing customers’ funds and, if found guilty, could go bankrupt and close down.
Miami Dade County expects FTX to honor their deal and pay the agreed sum of $5.5 million in January 2023; if not, they may have no choice but to reverse the naming rights.
