Big digital currency platforms are investing heavily in sponsorships, but their landing has sparked some controversy.
Cryptocurrency firms, which are investing aggressively in sports with the most followers, have generated a great deal of controversy.
The American platform for buying and selling cryptocurrencies Coinbase paid almost 14 million dollars for a minute of space in the last Super Bowl. And four other companies in the sector were advertised, something that had never happened before.
There are many examples of crypto asset companies trying to associate their image with sports. The old Staples Center where the Los Angeles Lakers play will be the Crypto.com Arena for at least 20 years in exchange for $700 million. Renaming the Miami Heat court was cheaper. For 135 million it went from American Airlines Arena to be called FTX Arena for the next 19 years.
The names of the pavilions are well paid, but the business goes further. In football, since last year the Inter Milan shirt has carried a message from Socios.com, which is landing in many other clubs. And Crypto.com will sponsor the World Cup in Qatar. In the engine it is similar: rare is the F1 team that does not count among its sponsors a platform such as Crypto.com, Socios.com, Binance, FTX, or Fantom.
The Wave Has Arrived in Spain
The Austrian Bitpanda sponsored this year’s Mutua Madrid Tennis Open and the 2021 Davis Cup. Several Primera teams have reached agreements with Chiliz, the owner of Socios.com, who also signed with UEFA and LaLiga. And Baskonia basketball has Bitci as its main sponsor, a Turkish platform that pays two million euros to name the team and appear on the jersey for one season.
The breach of their contracts is generating distrust towards Bitci. Espanyol has announced legal action because it owes him money. And Cádiz, Celta, and Alavés could follow in their footsteps. From the cadista team, of which Bitci is the main sponsor, they confirm that the firm owes them part of what was promised for this season and that it alleges problems due to the restrictions of the Turkish authorities on cryptocurrencies.
The Andalusian team signed for three seasons, and avoids revealing how much it receives. Its president, Manuel Vizcaíno, explained the problems in this way: “We chose Bitci because it was the one with the most credibility and it is regular. Bitci paid a part but has not paid all. Some Bitci sponsors have already given the fright: the McLaren F1 team, Sporting de Portugal, and the Italian Spezia have broken their contracts due to non-payments.
These companies are not only looking for sports clubs and organizations. Selecting ambassadors that the general public trusts is a way to gain respectability and counter negative messages that associate them with fraud, money laundering, and speculation. For this reason, the Binance platform hired Andrés Iniesta to publish a tweet where he said that he had chosen Binance to start in the world. The potential audience was more than 25 million followers, including young people with less financial culture.
It has not been disclosed how much Iniesta charged for the tweet, but it cost him a reprimand from the CNMV, which reminded him that they carry “relevant risks” because they are unregulated products. The body is increasingly vigilant: since January it has required companies that encourage investment to request authorization and include a message warning of the risks.
It is worth noting that clubs and championships associated with cryptocurrencies are risking their reputations. What would happen if the platform they wear on their t-shirt collapses and wipes out the savings of thousands of small investors? The fall of Luna (Terra), which signed a sponsorship agreement with the Washington Nationals -part of the MLB, the main US baseball league- only three months before his bankruptcy, shows that this is not a far-fetched hypothesis.
By Audy Castaneda
