MIAMI – Cryptocurrency giant FTX filed for bankruptcy Friday, leaving a number of unanswered questions, including a big one here in South Florida: what will happen to its naming rights deal for Miami’s FTX Arena and the money it was set to pay Miami-Dade County over the next two decades?
The company went under amid the crypto equivalent of an old-fashioned run on the bank.
After filing for Chapter 11 bankruptcy Friday, its clients remained unable to withdraw funds online.
Company CEO Sam Bankman-Fried resigned and apologized on Twitter.
“I was shocked to see things unravel the way they did earlier in the week,” Bankman-Fried wrote.
We’ve seen Bankman-Fried in South Florida before. He made a courtside visit to a Miami Heat game after his company bought naming rights to what had previously been known as the American Airlines Arena, paying $135 million over 19 years.
“FTX was an exchange that had a bright sheen on it,” cryptocurrency journalist Laura Shin said. “It was led by a CEO who was often on Capitol Hill and being photographed by regulators and lawmakers.”
Investor Mike Novograts, who stands to lose millions, spoke to CNBC.
“This is a tale as old as time, to some degree,” Novograts said. “Some young, charismatic guy in Bermuda shorts with floppy hair charmed the 20 best investors in the world.”
The question in South Florida is whether the charismatic entrepreneur also hoodwinked Miami-Dade County and whether the company will be able to keep its end of the deal moving forward.
Miami-Dade Mayor Daniella Levine Cava said Thursday that she is “closely monitoring” the situation.
FTX’s troubles have sent shockwaves through the crypto market, with the value of Bitcoin down nearly 20% over the past few days.