The FTX Arena is a thing of the past. On Wednesday, a judge in Florida denied FTX the right to name the arena in which the Miami Heat play. This news comes as the crypto currency industry is still struggling to come to terms with the catastrophic demise of the crypto currency exchange platform FTX.
The declaration (1) comes in the wake of a ruling handed out in the Bankruptcy Court of Delaware. In that case, the attorneys maintained that the monies from Alameda Research financed the arrangement struck with Miami-Dade county. After the exchange's mandate for the safe keeping of Chapter 11 bankruptcy documents in November of 2016, the county had previously secured authority to remove FTX signs.
The order that was issued on Wednesday formalized the parties' separation and made it possible for the owners of the Miami Heat arena to look for new business partnerships with the operation.
Legal Analyst David Weinstein believes that even though monetary compensation will be offered to redeem the money lost per the contract, this is one of those circumstances in which collaborators ultimately end up severing ties and moving on.
As per Weinstein, Miami-Dade will be required to decide what the town intends to do with the money that FTX received in the arrangement, or alternatively, the municipality would be required to return the money to the bankruptcy court that is reviewing the case of FTX.
After that, the court will investigate how Miami-Dade County obtained the money and will consider whether or not they, like any other investment in this case, were duped.
The History of the Deal
Sam Bankman-Fried, the CEO of FTX, signed a contract with Miami-Dade County, the arena's owners, for nineteen years. The arena, which has a seating capacity of two hundred and thirteen million and eighteen thousand, was opened for business in 1999 under American Airlines Arena. This was done in exchange for a naming rights deal with a cumulative value of $135 million, which would have paid the town $2 million a year.
The transaction had also caused some head-scratching in the crypto currency sector, not only due to the size of the cash involved but also because FTX had only been around for two years.
Within weeks, FTX went from being a firm worth billions of dollars to be the subject of a bankruptcy filing. The amount of FTX consumers and investors who lost a combined total of $8 billion may be greater than one million.
An eight-count indictment was filed against FTX founder and CEO Sam Bankman Fried a month ago, charging him with defrauding clients of the crypto currency exchange and lenders to the business. In addition, he is accused of scamming lenders to his privately operated hedge fund, known as Alameda Research.
Before the start of the crypto winter in 2022, naming rights have become a popular endeavor for crypto currency companies. In November 2021, Crypto.com, also a competing crypto currency exchange, agreed with the owners of the Staples Center, which at the time served as the primary arena for both the Los Angeles Lakers and the Los Angeles Clippers, for the sum of 700 million dollars.