Why did cryptocurrency derivatives exchange FTX agree to pay $135 million for the naming rights to a Miami stadium? For the good of humanity, says CEO Sam Bankman-Fried. (Well, in part.)
This was one motivation for FTX’s deal with the Miami-Dade, Fla., venue, home to National Basketball Association team Miami Heat, he said. To his mind, it’s partly an investment in the community.
“I’m looking at what role I can be playing in the world,” Bankman-Fried said. “Frankly, I hope we did a lot of good with some of the money that’s going to be spent there on this, and help a lot of residents in the county.”
Disruptive technologies have birthed a long line of billionaires that go on to print their names on the side of arenas and team jerseys. Amid a booming period in the cryptocurrency industry, Bankman-Fried said he’s looking at what his legacy will be.
Internet legends Chamath Palihapitiya is a minority stakeholder of the Golden State Warriors and Mark Cuban bought the Dallas Mavericks in January 2000. If the NBA approves FTX’s deal, Bankman-Fried would become the first crypto chief executive whose name could be synonymous with a sports franchise.
To be clear: This is still a business transaction. Bankman-Fried acknowledged there’s no “well-understood conversion break” to determine how much to pay for the naming rights and whether it’s a good deal. In some sense, the $135 million spent could be considered an advertising expense.
“We feel like we’ve built a really great product … and we’d really love to see a lot of people get exposed to it and try it out and see what they think,” Bankman-Fried said. Miami is a growing hub for crypto businesses, and the headline-grabbing deal could lure in a new set of users who have never played around with crypto, he said.
“You see reverberations from what happens in the states,” Bankman-Fried said.
The line between making money and doing good is frequently blurred in crypto. Non-fungible tokens, for instance, touted for the ability to democratize ownership of digital goods, are becoming an arena for scams, Bankman-Fried said.
“I worry that a lot of what’s going on in NFTs is not … someone taking a product with intense demand and finding a way to use blockchain to make it that much better,” he said. “The worry here is this ends up like 2017, 2018 with [initial coin offerings] and ends up giving a bad name to some of the space.”