FTX spent a lot of money on Web3 investments, gaming tech, and sports deals, but it’s not clear what will happen with these projects now.
With today’s industry-shaking news that cryptocurrency exchange Binance has agreed to buy FTX after FTX had a liquidity crisis, many people are wondering what this will mean for FTX’s many Web3 projects, including those related to NFTs and gaming.
During the crypto bull market of 2021 and even into early 2022, FTX made big moves in both areas. It started its own NFT marketplace, spent a lot of money on esports sponsorships, set up a gaming infrastructure division, and started a $2 billion investment arm called FTX Ventures.
But FTX’s fortunes seem to be getting worse as the crypto market continues to fall. If the Binance deal goes through, the company may soon be owned by someone else. we can learn a few things from the way its businesses and deals were set up.
The FTX NFTs marketplace was set up by FTX US, which is a separate company from FTX’s main global business. The marketplace included exclusive drops with NBA star Stephen Curry and music festival Coachella. Sam Bankman-Fried, the founder and CEO of FTX, said today that the possible deal between Binance and FTX US does not affect FTX US at this time.
What this means for FTX’s NFT goals in the long run is still not clear. If Binance bought FTX.com, would FTX US still be known by the same name? Could it change its name and keep selling the same products without Binance? For now, there are no answers to these questions, but as it stands, the FTX NFTs marketplace would not be part of the Binance deal.
FTX’s gaming projects and deals are much bigger and, in some cases, much harder to figure out right now. When FTX bought game studio Good Luck Games in March, FTX US handled the deal, so Binance couldn’t buy that team.
FTX US and FTX Trading Limited (FTX.com) collaborated on the unprecedented 10-year, $210 million sponsorship of Team SoloMid (TSM) beginning in 2021. In contrast, the original announcement of FTX’s seven-year sponsorship of the League of Legends Championship Series (LCS) did not mention FTX US.
FTX Ventures, the $2 billion investment arm of the exchange, invested in a variety of NFT and Web3 gaming developers, including Bored Ape Yacht Club producer Yuga Labs, the team behind NFT project Doodles, and Mini Royale: Nations developer Faraway. The division was founded by FTX’s parent business, therefore it may move to Binance alongside the exchange.
Bloomberg reported in February that FTX US formed the FTX Gaming division, which produced white-label infrastructure for Web3 games.
Because the deal between Binance and FTX came up quickly and hasn’t been finalized yet, there aren’t many clear answers right now about how the moves will affect FTX’s bigger plans. But it looks like the time of FTX’s big spending and fast growth is coming to an end. This will affect many of the above projects in some way.