Since the collapse of major crypto exchange FTX in November last year, the new board has done everything it can to raise money. The creditors have to be paid, but there are also rumors about a possible restart.
Before FTX collapsed, it paid large sums of money to American celebrities and athletes to promote the exchange. FTX now wants this money back. Bloomberg reports that the victims include former basketball player Shaquille O’Neal, current basketball star Stephen Curry and tennis star Naomi Osaka.
FTX Group’s advisors have analyzed whether certain payments made to athletes before the company’s bankruptcy last November can be recovered in Chapter 11
—Bloomberg (@business) September 8, 2023
The crypto exchange paid out hundreds of millions of dollars in trades
In total, FTX paid tens of millions of dollars to American athletes and international sports organizations. For example, the American Baseball Association received $5 million in exchange for a sponsorship deal. 13 million US dollars went to the Formula 1 team Mercedes-AMG. It also paid $3.5 million to the Golden State Warriors basketball team. FTX even paid $135 million to change the name of the famous stadium in Miami.
FTX’s current CEO, John Ray III, is working hard to raise money. According to an FTX spokesperson, there may be an opportunity to reverse some payments. Payments to O’Neal and Osaka are mentioned as one of these possibilities. The two received $2.5 and $2 million, respectively, in the final days of the crypto exchange.
So far, none of those involved have commented on the news.
The FTX fiasco
In November 2022, FTX collapsed after it was revealed that fraud, money laundering and manipulation of customer funds were taking place behind the scenes. In one fell swoop, billions of dollars of capital disappeared, including that of millions of customers.
Meanwhile, the man behind the FTX fiasco is behind bars. Sam Bankman-Fried, former CEO of FTX, was until recently awaiting trial under house arrest. However, the judge revoked his bail last month. He repeatedly attempted to obstruct justice by contacting potential witnesses. He has been behind bars ever since and will remain there until his trial begins in October.