FTX had several sports-related deals that are now falling apart. On Friday, the NBA’s Miami Heat and Miami-Dade County made the decision to end their partnership with FTX and rebrand the arena where the team plays.
According to its bankruptcy filing, FTX estimated that its assets were worth $10 billion to $50 billion and identified over 130 linked firms located in more than 60 countries. After suffering the cryptocurrency trading equivalent of a bank run, FTX is now billions of dollars in the red and about to implode. The exchange’s CEO and creator both left last week, and it filed for bankruptcy protection last week. The trading business reported “unauthorized access” and missing funds some hours later. Experts estimate that hundreds of millions of dollars could be missing.
What caused FTX to collapse?
Customers left FTX because they were uncertain about its financial stability, and the exchange eventually agreed to sell itself to a competitor, Binance. However, the purchase fell through as Binance was still conducting its due diligence on FTX’s financials.
According to its bankruptcy filing, FTX estimated that its assets were worth $10 billion to $50 billion and identified over 130 linked firms located in more than 60 countries.
The bankruptcy case was filed in Delaware on Friday by FTX and hundreds of associated entities, including founder Sam Bankman-hedge Fried’s fund, Alameda Research.
After being heralded as a savior earlier this year for helping stabilize several cryptocurrency companies in financial distress, Bankman-Fried was dealt a shocking hand this week. He has been a major Democratic fundraiser and his net worth was recently reported to be $23 billion.
VISA Part Ways
Sunday saw the announcement from Visa Inc, the world’s largest payments processor, that it was terminating all global credit card arrangements with defunct cryptocurrency exchange FTX. A Visa representative told Reuters, “the situation with FTX is terrible and we are monitoring developments closely.”
The issuer of FTX debit cards in the United States has informed us that the scheme is being phased out. At the beginning of October, FTX and Visa announced that they will be expanding their cooperation to include the introduction of account-linked Visa debit cards in 40 additional countries.
What are the Consequences?
Companies that had previously invested in FTX are now taking write-downs, and the value of bitcoin and other digital currencies has also declined. More stringent regulation of the complex industry is being called for by politicians and government officials. On Saturday, FTX announced that it was transferring all of its recognizable digital assets to a new “cold wallet custodian,” a secure offline storage method that does not permit remote access.
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