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.)
In an appearance Monday on CoinDesk TV’s “First Mover,” Bankman-Fried said he wants to make as much money as possible in crypto and give it away through the practice of effective altruism.
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.”