Embattled cryptocurrency exchange Binance has unilaterally terminated its sponsorship deal with the Argentine Football Association (AFA). Last month the world’s largest crypto exchange was sued by the Securities and Exchange Commission (SEC) in the United States, the CFTC in March and more recently has been cutting costs.
In a five year deal first announced in January 2022 and rumored to be worth $8 million a year, Binance was the joint Global Main Sponsor alongside Adidas. Its logo appeared next to sports apparel company until this afternoon. It was also the title sponsor of Argentina’s main football tournament, so references to Torneo Binance are still displayed on the official website.
Binance announced the parting of ways in a Tweet yesterday saying, “We regularly evaluate the results of our partnerships around the world and unfortunately, despite being offered time and opportunity, AFA has not fully met its contractual obligations.”
The irony is that landing the sponsorship was an acrimonious event. The national team already had an endorsement deal with the ByBit exchange and a fan token deal with Socios. When Binance first announced the sponsorship in January 2022 it was rolling out its own fan token platform and planned one for the Argentine team, captained by Lionel Messi during a World Cup year.
Socios was up in arms as it had already issued a fan token and had an ongoing relationship. It took legal action and plans for Binance’s Argentine fan token were dropped. Later in the year, Socios extended its fan token deal. With the enduring crypto winter, the market capitalization of the ARG fan token is now less than $2.5 million.
Meanwhile, it has been widely reported on Twitter and in the press that Binance has cut more than 1,000 staff during the last few weeks. It also slashed a range of staff perks, “Considering the current market environment and regulatory climate that has unfortunately led to a decline in profit,” according to a leaked internal message.
In February, Binance’s stablecoin partner Paxos was instructed to stop minting new Binance USD stablecoins. Additionally, the banking collapses earlier this year impacted the main crypto onramps. Starting new relationships while being sued by the SEC and CFTC is going to be more than tricky.