Argentina in Cryptocurrency War After Signing Deals With 2 Companies

Earlier this week, the Argentine Football Association (AFA) announced a deal with cryptocurrency exchange platform Binance. However, the AFA already have/had another crypto sponsor - and now the federation are in a battle with Socios, their first crypto sponsor.

Argentina Sign 5-Year Binance Deal Despite Existing Socios Deal

The new AFA x Binance sponsorship deal was agreed on for five years. Binance will be the new main sponsor of the national team & first league as well as managing AFA's official fan token. Fan Tokens are somehow a kind of a cryptocurrency.

However, in June 2021, the AFA already signed a three-year deal with Chiliz/Socios, including naming rights and a fan token that has already been issued. Socios views this deal as a breach of contract.

Socios issued the following statement:

“We are thoroughly outraged by AFA’s recent actions. AFA has issued a press release announcing a new Fan Token partnership, Sponsorship and Naming Rights with a different provider barely 9 months into a 3 year contractual relationship with Socios.com that remains in full force.

They pretend to grant the same rights we currently enjoy to a third party and we will be doing everything in our power to defer AFA from proceeding and to protect the rights of the fans who have purchased $ARG Fan Tokens. This is a direct breach of contract and we will be taking all necessary legal actions, in every forum and jurisdiction, to protect the rights of Socios.com, the fans and to ensure AFA comply with what they have agreed with.”

Argentina fired back in a statement: "The relationship between AFA and Socios is finished, and there is no existing legal relationship between the parties."

Fan tokens give fans the right to participate in community activities such as voting on decisions. Various teams have signed deals with cryptocurrency companies Socios and Binance recently, including Inter Milan, Lazio, Barcelona, PSG, and Manchester City.

Meanwhile, most fans who bought the original Socios Argentina Fan Token have lost a large part of their investment. Socios's Argentine national football team tokens is currently valued at around 1.25 GBP, down almost 80% from the peak of £6.02 last June.

In Argentina, around 3% of the population holds crypto. In 2021, there was an exponential rise in the popularity of crypto due to economic instability, high inflation, and a deflating local currency.

“Soccer and cryptocurrencies are life in Argentina, so it makes sense for Binance to partner with the Argentine Football Association,” said Binance’s Chief Marketing Officer, He Yi. “Through this agreement, we hope to support Argentine soccer at all levels and introduce Binance, the crypto world and the blockchain to soccer fans across the country and the world.”

Share your thoughts in the comments below.