An announced move by Brooklyn Nets player Spencer Dinwiddie to tokenize his $34.4 million contract with the club and allow investors to buy into it, will not be approved according to the National Basketball Association (NBA).
The New York Times reported a statement issued by the basketball association as revealing that the move would not go through.
The statement reportedly read,
“According to recent reports, Spencer Dinwiddie intends to sell investors a ‘tokenized security’ that will be backed by his player contract. The described arrangement is prohibited by the C.B.A., which provides that ‘no player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract.’”
Apparently, the NBA statement comes as a blow to Spencer who had been wanting to raise somewhere between $4.95 million to $13.5 million by selling to accredited investors, $SD8 tokens backed by his current three-year contract with the Brooklyn Nets.
The move would have allowed the player to have more money at his disposal by receiving his wages in advance from investors who would be paid back the principal as well as defined interests as he sees out his contract.
As Stmarket.co explained in the initial report, the only bet for investors who buy such a token is that Spencer would see out his contract and not engage in any behavior that would cause the club to terminate the deal. Investors would, on the other hand, be able to recieve additional incentives if Spencer puts in an improved performance that perhaps attract a raise of his contract with the Brooklyn Nets or any new employees.
However, any hope of the tokenization going through now hangs in the balance, even though the athlete told the New York Times that he was "going to meet with league officials to try to change their minds by further explaining the investment concept."