Cryptocurrencies have been entering the world of sports in the form of NFTs, fan tokens, club sponsorships, sports arena re-naming etc. Not only are today’s sports stars willing to take their payments in cryptos but also are willing to accept bonus packages in the form of fan tokens. Besides, they are quite active on the NFT scene as they interact with fans better by selling personalized digital collectibles in the form of NFTs.
But as cryptos have entered the sporting arena, so have the cases or number of stars and clubs who have become more prone to crypto scams or accused of deliberately manipulating or promoting a particular crypto or fan token to gain dividends.
The latest one who seems to be under the scanner is England football coach Gareth Southgate whose name has crept up, making top headlines in the sports section for his alleged involvement in cryptocurrency. Recently, a mass email campaign was shot as part of a crypto scam that falsely claimed info on Southgate’s investments.
According to the mass email, it is claimed that Mr. Southgate made a fortune using a crypto trading platform. In what is now dubbed to be a completely fictionalised email, it was claimed that Southgate had gone on American TV host Ellen DeGeneres’s show to talk about his success.
The mail alleged Southgate made a “secret investment”, which helped him to increase his wealth by 5,000 per cent. Mr. Southgate has outrightly denied the claims and has sought legal help on the same.
With crypto scams increasing with each passing day, and with sports stars increasingly turning to cryptos for various forms of transactions, promotions, etc., it is safe to say that even they need to tread carefully in the world of cryptos.
Let’s look at three sportspersons or clubs who either have been involved or been accused of such scams.
Perhaps the biggest name of the boxing world in recent times, Floyd Mayweather, was sued by investors over promoting the EthereumMax crypto. Mayweather had endorsed EthereumMax during a boxing match with YouTube star Logan Paul, wherein the crypto token was used to purchase tickets. He is being accused of manipulating the price of EthereumMax and is yet to disclose the fortune he made by promoting the token.
Besides, he was also under the radar for promoting his digital art piece titled ‘Legacy’, released on the Rarible marketplace. For this, Mayweather was fined by the SEC, which was settled by paying a fine of over US$600,000.
A leading e-sports group called the ‘FaZe Clan’ was under the lens amid allegations of a “pump and dump” crypto scam. The FaZe Clan kicked out one individual and suspended three of its members in July last year, wherein members of Faze Clan pumped the prices of a crypto called Save The Kids. FaZe kicked out Frazier “Kay” Khattri from FaZe Clan, and suspended Jarvis Khattri, Nikan Nadim, and Jakob for the crypto scam.
It was alleged that said members promoted the token to increase its fanbase. Buyers who bought the token ended up losing money.
17 out of 20 EPL clubs accused of exploiting supporters
According to a survey, 17 out of 20 English Premier League clubs had fingers pointed at them for exploiting supporters in the name of fan tokens. The survey concluded that the said number of clubs have one or more deals with crypto companies despite concerns related to potential crypto fraud.
In fact, Manchester City were forced to suspend a deal with a crypto firm 3Key Technologies. The crypto firm’s website claims that it makes 150% APY despite a lack of digital footprints regarding its senior management.
The recent Gareth Southgate incident has just emphasized the point that crypto frauds have entered the sporting world as well. Although the reach is limited, if it goes unregulated then it could take proliferate in the sporting arena.
At the same time, its critical for investors, fans and organisations to stay vigilant to stay away from such crypto frauds.