AFL stands by Crypto.com partnership amid fears of a cryptocurrency meltdown – The Guardian
League says no change to deal with Singapore-based exchange, as market is rocked by FTX collapse
The AFL is sticking by its Crypto.com partnership amid fears the company could be caught up in a market spiral after the collapse of FTX.
Last week FTX, one of the world’s largest cryptocurrency exchanges, filed for bankruptcy after the value of its cryptocurrency collapsed, triggering the crypto equivalent of a bank run, with investors seeking to withdraw their funds from the platform.
The company’s co-founder Sam Bankman-Fried resigned last week saying he had “fucked up”, as his reported wealth declined from US$16bn to US$3.
The collapse has already had implications for the wider cryptocurrency sector, with the value of Bitcoin declining from US$20,000 to US$16,600 since the news broke. Experts have predicted the FTX collapse will make it harder for the wider sector to recover from recent falls.
Before FTX filed for bankruptcy, there was a boom in sponsorship arrangements between sport and cryptocurrency businesses.
Mercedes F1, Miami Heat and the International Cricket Council all suspended their sponsorship deals with FTX in the wake of the company’s troubles.
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In Australia, the AFL signed a five-year deal with the Singapore-based Crypto.com earlier this year. It included sponsorship deals with four AFL clubs, and Crypto.com became the “official cryptocurrency exchange and cryptocurrency trading platform” for the AFL and AFLW.
A spokesperson for the AFL told Guardian Australia there had been no change to the partnership.
The CEO of Crypto.com has rejected suggestions his company might fall to the same fate as FTX.
Kris Marszalek, in an impromptu “ask me anything” on YouTube on Monday, said that FTX’s collapse did set the industry back “a good couple of years” in terms of reputation, but said Crypto.com was “the single most regulated company” in the sector, with licences or regulated entities in Europe, the UK, Canada, Singapore and Australia.
“Our platform is performing business as usual,” he said. “People are depositing, people are drawing, people are trading.”
He said the business practices that Crypto.com engage in are very different to that alleged about FTX.
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“We never engaged as a company in any irresponsible lending practices,” he said. “We never took any third-party risks, we do not run a hedge fund, we do not trade customers assets, we always kept one-to-one reserves.”
He said Crypto.com had a “tremendously strong balance sheet” and would prove wrong the people claiming the company was in trouble.
“I’ve been saying it for a few years and what I can say is that we will do what we’ve always done – we will prove people wrong with our actions and not our words,” he said.
“So in a couple of months all these guys are going to look now really, really bad for throwing allegations that have absolutely no substance.”
Crypto.com has been dealing with concerns over mistaken transactions in the past few months. It has been seeking to recoup funds from a couple in Australia after the company accidentally sent them $10.5m instead of a $100 refund.
In the past week, the company said it accidentally transferred $404m worth of Ethereum to a wallet linked to the Gate.io crypto platform. The currency has since been recovered.