In November 2021, the cryptocurrency exchange “Crypto.com” announced a groundbreaking deal in order to acquire the naming rights for one of the most prestigious arenas in the world.
Crypto.com signed a 20-year agreement with AEG, the owner and operator of the former Staples Center in Los Angeles. The arena is home to the most prestigious L.A. teams, including the L.A. Lakers and the L.A. Kings. And of course, the chip-less Los Angeles Clippers as well.
The problem now however is not when will the Clips arrive. Instead, its about Crypto.com being in a questionable position, as some speculate the cryptocurrency exchange could be able to collapse (see rumors).
Value of Lakers & Kings Crypto.com Arena Deal
The exchange invested a whopping amount of $700 million in the deal, to be paid in the span of two decades.
However, the cryptocurrency market is a lot different than it was one year ago. In fact, at the time of the deal, cryptocurrencies were booming.
In November 2021, bitcoin traded at around $60,000 — and Crypto.com’s native token “Cronos” was valued at nearly $0.90, and 40% of that net loss was lost in the past two weeks.
Fast forwarding one year, following several repetitive market crashes, bitcoin struggles to remain above $16,000. Meanwhile, Cronos lost over 95% of its value, today worth a mere $6 cents.
And there is no indication that the market will stabilize any time soon.
Today, one of the largest crypto lenders, Genesis shut down operations for the week. The DeFi company blamed the unexpected FTX crisis. The meltdown is so severe that the company is risking bankruptcy, according to The Block.
If that happens, the results would undoubtedly be catastrophic for the cryptocurrency world.
Evidently, the two companies have little in common today. Especially if you weigh in the fact that one of them is “allegedly“ a corrupt Ponzi scheme, led by Sam Bankman-Fried aka SBF.
The Los Angeles arena sponsor operates in no ways, the same. The disgraced crypto-exchange was run by a group of friends in the Bahamas, while Crypto.com has a real corporate structure.
Nonetheless, following the demise of the Bahamas-based platform FTX, users began to speculate on the viability of its competitor.
In fact, a couple of months ago, it was really easy to spot the similarities between the two exchanges.
Both companies quickly became the “rock-star” exchanges. The two of them invested millions of dollars into sports brands like the UFC, NFL, and MLB — While also showboating celebrity endorsements like Tom Brady.
The SBF led exchange even had its own arena, in another multi-million dollar deal with the Miami Heat. However, following the bankruptcy, FTX left the Miami-based NBA club high and dry. Owing well over $100 million from the naming rights arrangement.
If the CRO token’s parent exchange finds itself in the same situation as its rival FTX, the multi-million dollar deals it has with several sports clubs could fall through. The insolvency will likely affect everyone in the Los Angeles Kings & Lakers organization from top to bottom. However, those at the top could shield the lower wage workers from the hit.
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