Crypto Twitter Snaps Back As NBA Rejects Spencer Dinwiddie’s Tokenized Security
The NBA says Brooklyn Nets guard Spencer Dinwiddie can’t sell shares in his contract, squashing plans the athlete announced earlier this week.
Dinwiddie, a crypto supporter and Bitcoin fan, was planning to sell tokenized shares of his three-year $34.36 million NBA contract on his new Ethereum-based platform, called “DREAM Fan Shares. Set to launch in mid October, the platform would turn Dinwiddie’s contract into a public, digital investment opportunity.
The tokenized securities were part of Dinwiddie’s ambitions to create a new financial vehicle that gives athletes, artists and influencers more control over their own financial futures by providing them with earlier access to the capital represented in their contracts.
Dinwiddie also highlighted a key part of the engagement.
“And you’re going to be invested in watching your favorite player.”
But in a report published by the New York Times on Friday evening, the NBA said such a move would be a breach of contract since their agreement states that ‘no player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract.’
Dinwiddie turned to Twitter to voice his dismay at the NBA’s decision, pushing back on the suggestion that his platform and the sale of the tokenized securities would violate his contract.
“The news tonight is disappointing because all it does is inspire #FUD in the birth of a previously unrealized asset class under the assumption that I’m breaking a rule that I’ve been clear I’m not breaking in multiple conversations.
I love the NBA it is the greatest league in the world. And it is an honor to be their partner. But to put this quite simply I’m not assigning my contract and have been explicit in that when I’ve spoken to them.”
Praised by crypto enthusiasts, the innovative platform promises to attract athletes and artists who can turn their contracts into securities in order to generate cash flows.
According to the announcement, token holders of Dinwiddie’s contract would have received monthly crypto payments plus interest in PAX stablecoins while Dinwiddie would have gotten upfront access to more of the capital in his contract. Investors would have also been entitled to a portion of any potential bonuses.
Democratic presidential candidate Andrew Yang expressed his disappointment.
I think @SDinwiddie_25 selling interests in his professional earnings is genius and am disappointed the NBA is disallowing it.
— Andrew Yang (@AndrewYang) September 28, 2019
Changpeng “CZ” Binance, the CEO of cryptocurrency exchange Binance, agreed with Yang’s statement.
Couldn't agree more.
People should be allowed to enter into mutually agreed on commercial contracts.
— CZ Binance (@cz_binance) September 28, 2019
Others pointed out that the NBA’s decision is similar to that of a bank that enforces control, while cryptocurrencies, by contrast, are designed to move away from centralized powers and allow people to transact peer-to-peer – without asking for permission.
The NBA shouldn't have a say in how he digitizes his earnings.
Just like who are banks to tell u where u can and can't send ur $$
— Crypto King (@JBTheCryptoKing) September 28, 2019
Dinwiddie sees the two working together: the NBA and crypto.
“I look forward to an understanding because as I stated in the previous articles it was made with the NBA in mind. Hopefully being able to bring added fan engagement to the different players/teams and liquidity for team owners.”