Yesterday’s announcement that cryptocurrency exchange Binance has entered into a long term partnership with the Argentine FA (AFA) has led to backlash from blockchain firm Chiliz, and prompted questions about the future of token collaborations in sports.
The controversy surrounds the deal previously agreed between the AFA and Socios, specifically the launching of a fan token as part of the lucrative collaboration.
Chiliz insists that the launch of a new token with Binance is a ‘flagrant breach of contract’ and said it would do all it needed to do to ensure that its token holders were not undermined.
Speaking to Crypto Noticias, Chiliz commented: “We are stunned by the statement made public today by AFA announcing an agreement to grant the rights that legally correspond to us, to another provider.”
The dispute brings into question the future for token partnerships and sporting organisations, with the longstanding value of tokens potentially being viewed sceptically by fans if they risk being devalued as a result of similar, competing deals.
In announcing the new deal, Claudio Tapia, President of the AFA, said that the association stood by the deal and its legality, arguing that it met all the conditions it was seeking.
Adding further scepticism to deals around cryptocurrency and sports clubs, an abundance of fans and token holders have been left in a difficult position over the liquidation of cryptocurrency-based fan platforms, IQONIQ which was first reported by The Times.
Fans that purchased tokens from IQONIQ – previously a partner of Crystal Palace, Essex County Cricket Club and numerous Betfred Super League sides – have now been left with a token of very little value after the firm’s administration.
Both situations will lead critics of crypto partnerships in football to voice their concerns with greater intensity when it comes to the need for deeper regulation of the sector, which is currently relatively free from restraints.
Those critical of the collaborations are likely to call for greater protection for fans that wish to engage with tokens, and enhance their interaction with a club or league through tokens.
Furthermore, earlier in the year Premier League champions Manchester City also backed out of a previously agreed partnership with an unknown cryptocurrency firm following push back over the deal and legitimacy of the company involved.
Many of the questions raised over the transaction were around the alleged lack of transparency about the crypto firm, which is a DeFi trading analysis and advisory platform.
In spite of a regional partnership being announced by the pair, no specific region was mapped out and numerous details over the collaboration were unclear.
Just days later, City issued the following statement: ”Prompted by the club’s interactions with 3Key Technologies in recent days, Manchester City is now conducting further enquiries regarding 3Key Technologies and the partnership has been suspended pending satisfactory resolution to all of those inquiries.”