It has been almost one year since the FTX crypto exchange filed for bankruptcy and the contagion brought about by its collapse continues to unfold.
So far, the exchange has gone after various companies and institutions in a bid to recover the billions of dollars owed to its creditors and formulate a repayment plan. But this time around, the bankrupt crypto company has turned its attention toward promotional payments paid to celebrities and the like.
FTX Wants $18 Million In Promotional Payments
During its peak back in 2021, the FTX exchange was known for its far-reaching marketing campaigns. Celebrities were not left out as the likes of Tennis star Naomi Osaka and Basketball legend Shaquille O’Neal were also brought on by the exchange for promotional purposes. These deals saw the stars receive millions of dollars in prepayments, and now, the exchange wants it back.
FTX’s intent to claw back these promotional payments was made in a massive August 31 filing with the court. In total, the exchange is looking to clawback approximately $18 million in prepayments made to celebrities, as well as sports teams and arenas.
The largest single prepayment that the exchange is looking to recover is a $3,398,046.99 payment made toward the deal for the naming rights of the Miami Heat Arena. In 2021, FTX shocked the crypto space when it acquired the rights to rename the infamous Miami-Dade arena to the FTX Arena for a $135 million deal spanning five years. However, a year later, the exchange collapsed and the arena stripped the FTX name.
Approximately $18 million made in prepayments for promotions
Other notable payments include $2,348,338.83 made to Canadian businessman Kevin O’Leary, $1,850,000 made to GameStop, a total of 2,564,187 made in two payments to Fortune Media Inc., and $1,989,166.67 made to the Coachella Music Festival, LLC.
The celebrity names that pop in the filing 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 $417,150 from the Warriors professional basketball team.
FTT Token price continues to fall amid exchange's battles | Source: FTTUSDT on Tradingview.com
Crypto Market Braces For Possible Exchange Dumping
Amid the ongoing legal battle to recover FTX funds belonging to customers, rumors have emerged that the exchange may be getting ready to dump its significant crypto stash. A decision is expected to be made on Wednesday, September 13, regarding FTX’s request to sell its crypto holdings, and if it is granted, then it could see the company offload its $3.4 billion crypto stash on the market.
The exchange had previously appointed Galaxy Digital to be in charge of selling its crypto holdings, meaning that it expects to be granted leave from the court to do so. With only two days to go, coins such as Solana (SOL) have already begun to decline in anticipation of the exchange selling the over $400 million worth of SOL it holds over time.
FTX also holds a significant amount of Bitcoin, Ethereum, Dogecoin, Polygon, Aptos, and its native token, FTT Token. However, it is unlikely that the exchange would be able to dump all of these tokens at once with some being locked under vesting, as long as the court puts a limit on how much can be sold at a time.
Featured image from Unsplash, chart from Tradingview.com