Nearly a year has passed since the FTX cryptocurrency exchange filed for bankruptcy, and the contagion from its collapse continues to spread.
The exchange has so far gone after multiple companies and institutions in an effort to recover billions of dollars owed to creditors and come up with repayment plans. But this time, the bankrupt cryptocurrency company has turned its attention to promotional payments to celebrities and others.
FTX wants $18M in promotional payments
At its peak in 2021, the FTX exchange was known for its far-reaching marketing campaigns. Celebrities aren’t left out either, with the likes of tennis star Naomi Osaka and basketball legend Shaquille O’Neal also being brought in by the exchange for promotions. Those deals saw stars receive millions of dollars in advances, and now, the exchange wants that money back.
FTX stated its intention to recoup these promotional fees in a massive court filing on August 31. In total, the exchange hopes to recoup about $18 million in upfront payments to celebrities, sports teams and stadiums.
The largest upfront payment the exchange hopes to recoup is the $3,398,046.99 it paid for naming rights to the Miami Heat Arena. In 2021, FTX shocked the cryptocurrency space when it secured the rights to rename the infamous Miami-Dade stadium FTX Arena in a $135 million, five-year deal. However, a year later, the exchange collapsed and the venue stripped the FTX name.
Approximately $18 million made in prepayments for promotions
Other notable payments include a $2,348,338.83 payment to Canadian businessman Kevin O’Leary, a $1,850,000 payment to GameStop, two payments totaling $2,564,187 to Fortune Media Inc. and a $1,989,166.67 payment to Coachella Music Festival, LLC.
Celebrity names appearing in the documents include Naomi Osaka for a total of $308,33.34, ABG Shaq, LLC for $749,999.93, Trevor Lawrence for $205,555.35 and David Ortiz for $270,833.55. The exchange is also seeking $417,155 from the Warriors professional basketball team.
FTT Token price continues to fall amid exchange's battles | Source: FTTUSDT on Tradingview.com
Crypto markets brace for possible exchange dumping
Amid the ongoing legal battle to recover FTX funds belonging to customers, there are rumors that the exchange may be preparing to sell off its large cryptocurrency reserves. A decision on FTX’s request to sell its crypto assets is expected on Wednesday, September 13, and if approved, the company could put its $3.4 billion worth of crypto assets on the market.
The exchange has previously appointed Galaxy Digital to sell its cryptocurrency holdings, meaning the exchange is expected to receive court permission to do so. With just two days left to trade, the price of tokens like Solana (SOL) is already starting to fall as the exchange is expected to sell its holdings of SOL worth over $400 million over time.
FTX also holds significant holdings of Bitcoin, Ethereum, Dogecoin, Polygon, Aptos, and their native token FTT tokens. However, as long as the courts limit the amount that can be sold at one time, it is unlikely that exchanges will dump all of these tokens at once, with some of them being locked in exercise limits.
Featured images from Unsplash, charts from Tradingview.com