SBF’s bankrupt FTX exchange fights to recover millions of dollars from athletes, Formula 1 racing teams
- FTX exchange’s advisors are scrutinizing whether millions of dollars in funds offered to Shaquille O’Neal, Naomi Osaka and several NBA teams can be reversed.
- The bankrupt crypto trading platform funded Major League Baseball for $4.9 million, and $12.2 million in partnership with Formula 1 racing teams, among others.
- FTX’s advisors believe a portion of the Formula 1 related payments can potentially be reversed in Chapter 11.
FTX exchange is currently probing whether millions of dollars in payments, made to Shaquille O’Neal, Naomi Osaka, Formula 1 racing team and Major League Baseball among others. The bankrupt crypto exchange’s advisors believe a recovery is likely under Chapter 11.
Also read: Coinbase CEO Brian Armstrong says it would help if Gary Gensler was no longer SEC Chair
FTX attempts to clawback funds from athletes
Samuel Bankman-Fried’s FTX exchange filed for bankruptcy in November 2022. Since then, the bankrupt crypto trading platform has attempted to recover funds from its several commitments and payments to influencers, market makers, other exchanges and athletes, among others.
Financial advisors hired by the firm disclosed in recent court filings that payments made to Formula 1 racing teams are likely to be recovered under Chapter 11. Advisors reviewed several payments made to Shaquille O’Neal, Naomi Osaka, MLB, Mercedes racing team and identified millions in funds, to target for recovery.
The team of advisors is probing if pre-bankruptcy payments can be used to raise capital to return to the exchange’s creditors. There is no detailed accounting of FTX’s spend on endorsements, however the exchange is compiling the information to aid the recovery process.
The disclosures made by advisors reveal an inside look into FTX's lavish spend on celebrity athletes, Major League Baseball, National Basketball Association teams and Formula 1.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
