Argentinian Football Association mulls taking Binance to court
The Argentinian Football Association (AFA) has contested allegations of ‘contractual breaches’ as the reason for Binance’s termination of their sponsorship deal.
According to SportBusiness, the AFA believes that Binance’s abrupt termination of the sponsorship agreement is more closely linked to the exchange’s ongoing legal and financial challenges rather than any failure on the association’s part to meet obligations outlined in the contract.
Furthermore, the sport governing body is mulling the idea of taking legal action against Binance to resolve the contractual dispute between the two parties.
The crypto winter and increased regulatory scrutiny may have prompted Binance to reassess its financial priorities. Recent reports suggest that the world’s largest crypto venue laid off over 1,000 employees and halted certain employee benefits due to declining profits. There is also speculation that eventually, more than a third of the company’s workforce of 8,000 may be affected by the job cuts.
Earlier this week, Binance unilaterally terminated a five-year sponsorship agreement with the Argentine soccer association (AFA) after just one year. Citing a breach of contract, the crypto giant said the AFA has not fully complied with its contractual obligations, which goes against business values and partnership principles, despite being offered time and opportunities.
Binance inked the deal back in January 2022, which allowed it to become the main sponsor of all the Argentinian soccer teams on a global scale. Furthermore, the exchange secured the prestigious naming sponsorship of AFA’s top-tier league.
The partnership also entails the release of a brand-new fan token. Nevertheless, prior to this agreement, the Argentinian Soccer Association had already introduced its own fan token, in collaboration with Socios.com, a prominent player in the fan token industry.
As a consequence, a legal dispute arose after Socios filed a lawsuit against the AFA for ending its sponsorship contract and replacing it with the one it signed with Binance. A national commercial court in Argentina ordered AFA to recognize the contracts signed with Socios and prohibited the association from taking any action that hampers their exclusive rights.
AFA stated that it will appeal the decision, claiming that the fan token site defaulted on a payment and failed to promote the Argentina token, while Socios asserts that it made all necessary payments and did not misuse AFA’s image.
There were also allegations that AFA received a higher financial offer from Binance and attempted to pressure Socios to match it. The association denied terminating the agreement to make way for Binance and asserts that the crypto exchange had expressed interest in AFA before Socios.