TSM naming sponsor FTX in trouble after Binance pulls out of acquisition deal
Cryptocurrency exchange FTX, which struck a naming sponsorship deal with TSM in 2021, was set to be acquired by its biggest rival, Binance. But the deal has collapsed after new information about FTX’s finances came to light.
Binance founder Changpeng Zhao had stated on November 8 that his company would “fully acquire FTX.com and help cover the liquidity crunch” for an undisclosed amount — a deal that would bring together the two biggest cryptocurrency exchanges on the planet.
Mr. Zhao added that his company would examine FTX’s finances as part of a due diligence review and that it could “pull out from the deal at any time.”
That due diligence appears to have shown significant issues with FTX’s financial situation.
In a tweet, Binance said that it had pulled out of the deal due to “news reports regarding mishandled customer funds and alleged US agency investigations.”
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance added.
In the past few days, FTX “has been scrambling to meet a surge of withdrawal requests,” The New York Times reported on November 8.
The news of FTX’s financial issues comes less than 18 months after the cryptocurrency exchange agreed to a ten-year naming rights deal with TSM worth $210 million. As part of the agreement, TSM’s teams across various games would compete under the name TSM FTX.
But shortly afterward, it was revealed that TSM would not be able to promote FTX in League of Legends and VALORANT broadcasts due to Riot Games’ guidelines about partnerships with cryptocurrency exchanges. In a surprising turn of events, LCS announced two months later that it had agreed to a seven-year sponsorship agreement with FTX, which became the league’s official cryptocurrency exchange partner.
In April 2022, FTX struck a one-year, $3.2 million sponsorship deal with Brazilian organization FURIA to expand its presence in the South American market.
It remains unclear if FTX’s financial difficulties, now that the acquisition by Binance has fallen through, will affect the exchange’s sponsorship agreements with TSM and FURIA, as well as their 19-year, $135 million deal to rename the Miami Heat’s home the “FTX Arena”.
Last month, TSM’s VP of Esports Dominic Kallas spoke with Dexerto about the organization’s forthcoming return to CS:GO with a European team. The move is part of the company’s expansion plan as it looks to increase its global presence.
TSM did not immediately respond to requests for comment.