Binance terminates sponsorship deal with Argentine soccer association
Binance has unilaterally terminated a five-year sponsorship agreement with the Argentine soccer association (AFA) after just one year.
Citing a breach of contract, Binance 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, Binance 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 three 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 giant crypto exchange had expressed interest in AFA before Socios.
Binance has been expanding its services in Argentina, most recently allowing crypto purchases for its users with their local currency, Peso. The service allows Binance customers in the inflation-hit country to convert their local currency directly into cryptocurrencies through a local partner. Previously, Binance had only operated in Argentina as an intermediary platform to match buyers and sellers.
In another twist, 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.