Tuesday, March 21

Iqoniq and a hole of 800,000 euros for Real Sociedad: football has a problem with crypto business

Iqoniq is a company that raised a promising crypto platform of ‘fan tokens’ with which, for example, to involve the followers of sports clubs in the decisions of these entities. The idea conquered several of them, but after various scandals Iqoniq has entered the liquidation phase and has left millions in debt. Among those affected, the Royal Society, to which must 820.000 euros.

The fever conquered the clubs. Soccer and sports are increasingly involved in the world of cryptocurrencies. The growing popularity of bitcoin or Ether or NFTs has meant that these types of platforms have ended up conquering world-class sports clubs. the lakers stadium it’s called now Crypto.com Arena (formerly Staples Center) thanks to a $700 million deal. Barca came to an agreement with the Socios.com platform, and Atlético de Madrid also launched its own fan token a few months ago. Iqoniq had reached agreements child LaLiga but also sponsorships with teams such as Real Sociedad, Crystal Palace or Olympique de Marseille, as well as with the Euroleague, the European Handball Federation or the McLaren Formula 1 team.

What are ‘fan tokens’. They are a type of cryptocurrency very targeted at sports clubs. It gives its holders access to benefits such as voting on club decisions (“what shirt design do we put on for next season?”), special products, or invitations to special events. With this type of platform, a kind of “private social network” could theoretically be formed for each club in which the Iqoniq tokens (called IQQ) were currency. These tokens can be bought, sold or traded just like bitcoin or Ether, and Iqoniq issued their own token. One that a year ago was worth 0.19 euros and that after collapsing is now worth 0.0036 euros.

ripped off clubs. Iqoniq soon began to become the focus of doubts. The English club Crystal Palace canceled their agreement when the company did not make the expected payment in February 2021, but Iqoniq still reached other agreements such as the one he got with Bayer Leverkusen, which would also be canceled just two months later to go to another sponsor for their t-shirts (also related to the crypto world, by the way). The deal was also suspended. with the Rome, and the associations with Monaco and Olympique de Marseille also ended falling apart. Among those affected is Real Sociedad, to which, as we mentioned, Iqoniq owes 820,000 euros, which will be difficult for them to recover.

A CEO with a suspicious past. What we know is that the company had promised launch their fan engagement platform in early 2021, but that platform has never been launched. Since their meteoric rise in early 2020 scandals, suspicions and the aforementioned breaches of contracts have caused a situation that it looked bad and that it has finally ended with a liquidation process while the CEO of the company, Kazim Atilla, insists that his company is still operational and that his tokens will rise in value again. The same Kazim Atilla who according to the SEC of the United States was part of a Ponzi scheme in 2014.

a dangerous game. so describe en The Guardian this sponsorship revolution that various top-level soccer clubs are signing with companies related to the world of cryptocurrencies. Not only clubs are already part of this fever: several players like Pogba or John Terry have become public supporters of cryptocurrencies or NFTs, which have also become a phenomenon in the world of football. In recent times we have seen how other famous athletes have begun to collect their salaries in cryptocurrencies (or almost). The problem is that as Bill Esdaile of sports marketing firm Square in The Air said, “few people understand how crypto works and how many decisions are made based on trust, thinking that if crypto firms say they have the money, they got it”. The problem extends to other sports like cycling, and those quick profits—such as those provided by the now advertising-limited online betting and gaming industry—have ended up luring these entities into businesses where the risk and volatility are enormous.