In the wake of FTX’s collapse, Miami-Dade County wants the now-bankrupt cryptocurrency exchange’s logo removed from its sports arena, where the NBA’s Miami Heat play their home games.
The county, which owns the stadium, has asked a federal judge to immediately end a 19-year, $135 million lawsuit. naming rights agreement with FTX, in a motion filed Tuesday in the Delaware court where FTX’s bankruptcy proceedings are taking place. Miami-Dade argued that continuing the deal with the failed company would cause “significant hardship” for the county and hurt efforts to find a new sponsor for the arena.
FTX founder Sam Bankman-Fried and his company are under investigation by the Department of Justice and the Securities and Exchange Commission for allegedly embezzling client funds, much of which may have been funneled into Bankman-Fried’s hedge fund Alameda Research.
After FTX filed for bankruptcy on November 11, a judge issued a “stay” order preventing any entity from acting against the company, including Miami-Dade’s desired termination of its sponsorship deal.
A hearing in the case is set for December 2. 16. Unless the court grants the county relief from the suspension order, Miami-Dade and the Heat will remain bound by the agreement, which began last year.
FTX has already paid Miami-Dade nearly $20 million and has a $5.5 million payment due in January. Under the terms of the agreement, a default by FTX would require the company to pay the county over three years. That comes to $17 million, which the county is seeking in damages, according to the county’s court filing.
The company logo still decorates the building, the heat basketball court, and the team jerseys. For months, a commercial featuring Heat veteran Udonis Haslem promoting the cryptocurrency company has aired on local game broadcasts.
Under Bankman-Fried, Bahamas-based FTX quickly grew to become the third-largest cryptocurrency exchange, recently valuing itself at about $30 billion. Good branding and press helped present the 30-year-old businessman as a promising leader who could bring legitimacy to a largely murky and unregulated industry.
The deal with the Miami Heat was just one of various sports sponsorship contracts FTX has signed off, according to Decrypt. In 2021 alone, the cryptocurrency company had secured deals with Major League Baseball, the NBA’s Golden State Warriors and Washington Wizards, the NHL’s Washington Capitals, and esports giant TSM.
In an interview with the cryptocurrency news outlet that year, then-CEO Bankman-Fried what he asked how his two-year company had the long-term stability needed to honor a nearly 20-year contract.
“Without going into details, it’s been a pretty good year for us,” Bankman-Fried said. “To the point where, frankly, we don’t need to depend on the other 18 years to have the funding for this.”
A year and a half later, your company owes creditors over $3 billionwhile new leadership struggles to account for the disappearance of an unknown amount of customer money.