(MIAMI, FLA) — Miami-Dade County is aggressively looking for a new sponsor for the home of the Miami Heat after the crypto currency exchange, FTX filed for bankruptcy last week.
The county has a $135 million dollar deal for 19 years with FTX, but has received only $20 million from FTX so far. Fortunately, the contract allows the county to find a new sponsor if FTX declares bankruptcy.
FTX former CEO and former billionaire Sam Bankman-Fried or “SBF” lost virtually his entire fortune over the course of a single day, in what Bloomberg has called “one of history’s greatest-ever destructions of wealth.”
The cryptocurrency sector is reeling after the collapse of FTX, a digital currency exchange valued earlier this year at $32 billion and made famous by a Super Bowl ad starring comedian Larry David.
Concerns of financial instability at FTX — a top platform where users buy and sell crypto — triggered a wave of customer withdrawals totaling billions of dollars. But FTX lacked sufficient funds to pay sellers, instead imposing a halt on withdrawals altogether. On Thursday, FTX reopened withdrawals to some users, cryptocurrency news outlet CoinDesk reported.
Still, some crypto traders on the platform cannot access their money and may never get it back. The debacle coincides with a rough year for crypto, as the value of bitcoin has fallen more than 60%.
Sam Bankman-Fried, 30, a prominent crypto entrepreneur and the CEO of FTX, apologized on Thursday, saying he “should have done better.” Meanwhile, Gary Gensler, head of the Securities and Exchange Commission, responded to the crisis on CNBC with a call for bolstered crypto regulation: “Investors around the globe are getting hurt,” he said.
FTX did not immediately respond to ABC News’ request for comment.
Here’s what you need to know about the collapse of FTX and what it means for the future of cryptocurrency:
Why FTX collapsed
The fall of FTX centers in part on the cryptocurrency exchange’s close relationship with Alameda Research, a crypto hedge fund also founded by Bankman-Fried.
Major concerns about FTX started last week when CoinDesk published an article that found a significant portion of Alameda Research’s assets consist of FTT, a token created by FTX that allows users of the exchange to access discounted trading fees. Because FTT is relatively illiquid, the report raised fears among some about the capital reserves at Alameda Research and thus FTX.
Alameda could not be reached for comment, since its website is currently dark.
“The basic risk is if other investments at Alameda went underwater – and many crypto investments have been falling in recent months – then they may not have been able to repay funds to the exchange,” David Yermack, a professor of finance at New York University’s Stern School of Business, told ABC News.
ORIGINAL STORY MARCH 27, 2021 — The American Airlines Arena will officially be renamed after a cryptocurrency: FTX Arena.
The County Commission approved a 19-year partnership with FTX to rename the home of the Miami Heat to FTX Arena.
The county approved the proposal, sponsored by Commissioner Keon Hardemon, to invest $90 million in net revenues from the partnership to go towards programs to reduce gun violence and to “expand economic prosperity for Miami-Dade residents.”
FTX is a cryptocurrency exchange where customers can trade Bitcoin and other cryptocurrencies.