The Miami HEAT and Miami-Dade County announced they were severing their connections with the notorious Bahamas-based cryptocurrency exchange immediately in a joint statement just hours after FTX declared bankruptcy.
Social media posts that claim to show the removal of the FTX emblem from the arena’s roof have already gone viral. The hefty $135 million contract with FTX lasted for 19 years. A press statement issued on Friday stated,
“The reports about FTX and its affiliates are extremely disappointing. Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena.”
The collapse of FTX, once one of the biggest cryptocurrency exchanges in the world, this week was caused by a liquidity problem that set off a chain reaction that led to the bankruptcy of all of the exchange’s subsidiaries, including FTX US and its quant trading firm Alameda Research. According to reports, the entire portfolio of enterprises is currently between $10 and $50 billion in the red.
The demise of FTX has already had an impact on other areas of the cryptocurrency business and beyond, including Miami. Under the guidance of the pro-crypto Mayor Francis Suarez, Miami has made an effort to become a hub for the industry by allowing companies like FTX to open offices there.
After Sponsorship Cancellation, Here’s How Much FTX Owes Miami
According to an agreement made between the bankrupt exchange and Miami-Dade County last year, FTX owes them $16.5 million. Miami-Dade County is the owner of the building formerly known as FTX arena.
The $135 million contract stipulates that it will be paid off over 19 years. The agreement also states that the exchange will be required to pay three years’ worth of contract fees within 60 days in the case of an FTX default, which includes a “insolvency event.” FTX will now be required to pay $16.5 million over the next three years after paying $14 million at the time of the contract’s signing. The County claims it has the right to levy 12% interest per year until the payment is made if it is not made within ten working days.
The exchange gave the County $14 million in the first year, but between years 2-4, it owes a charge of $5.5 million per year. It owes $6 million in year 5, $7 million in year 10, and $8 million in year 19. The County and the Miami Heat announced late Friday that they had severed ties with FTX due to its insolvency.