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Binance, the world’s leading cryptocurrency exchange, has abruptly ended its year-long sponsorship deal with the Argentine Football Association (AFA), citing compliance issues while grappling with regulatory issues and market downturns.
Binance has decided to poner fin a su asociación con la AFA (Asociación del Fútbol Argentino). Regularly, evaluate the results of new alianzas in todo el mundo y, lamentably, a pesar de que se han ofrecido tiempo y oportunidades, la AFA no ha cumplido plenamente con…
— Binance Argentina (@BinanceArg) July 17, 2023
Originally planned as a five-year deal, the deal fell apart after just one year. The Crypto exchange giant cited the AFA’s failure to meet contractual obligations as a cause for termination:
“AFA has not fully met its contractual obligations, which is contrary to our business values and partnership principles.”
Binance expressed disappointment with AFA’s inability to fully meet its contractual terms despite numerous opportunities, contrary to Binance’s values and business principles.
This alliance has seen Binance become the main sponsor of Argentina’s top national football team and the title sponsor of the national football league. The deal sparked controversy when the AFA terminated an existing contract with Socios, a fan token platform, to establish the deal.
Subsequently, Socios sued stock against the AFA in January 2022, while still serving as the exclusive provider of the AFA’s official fan token, ARG, until 2026. The lawsuit has since been resolved.
Meanwhile, Binance has been in hot water recently, with multiple instances of regulatory non-compliance. In Brazil, there were rumors that the exchange was acting as a pyramid scheme, prompting the CEO of Binance Brazil to testify before Congress.
Then, in Europe, Binance was asked to leave Belgium and the Netherlands, citing regulatory issues. The exchange was forced to immediately shut down or move its customers to a local competitor, respectively.
In addition to Binance’s growing regulatory issues, a lawsuit was filed by the US SEC against Binance.US, its US subsidiary, and founder Changpeng “CZ” Zhao in June, calling it:
“flagrant disregard for federal securities laws and the investor and market protections those laws provide.”