Fan token site Socios sued the Argentine Football Association (AFA) for unilaterally terminating a sponsorship contract with it and signing a similar one with crypto exchange Binance.
Socios filed a complaint before an Argentinian national commercial court led by judge María José Gigy Traynor, who issued a prohibitory injunction ordering AFA to recognize the three contracts signed with Socios, according to the official decision document, which was seen by CryptoX.
AFA recognized the injunction but told CryptoX it is provisional and will be appealed by the association.
According to the injunction, AFA must “refrain from performing any action, carry out any proceeding, or apply any measure that would hamper the exercise of exclusive rights” by Socios.
The legal actions came just days after the AFA announced that it had signed an agreement with Binance to sponsor its national football teams and professional football league for five years. The deal includes the development of a fan token that will be released to the market “shortly,” the crypto exchange said in a statement.
Three weeks ago, the AFA canceled a similar package of three contracts that it signed in 2021 with Socios, including the launch and maintenance of the national team token, $ARG, both parties told CryptoX.
The AFA alleges that Socios had defaulted on a payment four months ago, the association told CryptoX, without disclosing the exact amount. According to the AFA, Socios received repeated notices but did not make the payment.
The AFA also said that Socios did not sufficiently promote the Argentina token, which was released in August 2021 at $4.32 and fell to trade at $1.18 on Tuesday. In addition, the AFA said that there were “several breaches” in the use of the image of the national team and the professional soccer league by Socios, without disclosing details.
Socios told CryptoX that it made all corresponding payments to the AFA and has no debts with the association. The company said that the token price does not appear in any clause as a sufficient reason to cancel the contract, and added that “there has been no misuse of the AFA’s image.”
The AFA said that it has started its own legal actions against Socios, alleging non-performance of the contract.
According to a source close to the transaction, the AFA received a higher financial offer from Binance and tried to pressure Socios to match it, something the company did not accept as there was a contract in place. The AFA denied that accusation.
The AFA denied that it had terminated the agreement with Socios to make room for Binance and that Binance always had AFA on its radar. “Binance had presented interest in AFA for several years, even before Socios,” an AFA spokesperson told CryptoX.
Binance hadn’t responded to CryptoX’s queries at the time of this writing.
Second termination
In parallel, the AFA canceled an agreement it had signed in November with Singapore-based cryptocurrency exchange Bybit as the main global sponsor of its national teams for two years, through which the company would appear on the training apparel.
According to the AFA, the contract had a 90-day trial period, after which both parties would sign a final two-year contract. The cancellation, AFA added, occurred during that interim period.
“Bybit will explore all options to protect our interest, even as we seek more information in order to determine the best course of action at this time. It is our hope that the matter would be resolved in an amicable manner, and we look forward to achieving a fair and just outcome,” Bybit’s head of communications Igneus Terrenus told CryptoX.
