- Legal States
Stoyan Todorov November 23, 2021 3 min read
Manchester City Puts 3Key Crypto Deal on Hiatus Due to Lack of Proper Due Diligence
Growing concerns about the association between professional soccer teams and immoral partners have increased over the years, most recently forcing Premier League franchise Manchester City to put its newly minted partnership with 3Key Technologies, a crypto start-up, on hiatus while more information is needed to establish the company’s credibility.
With many crypto companies proving dodgy from the start, Manchester City came under fire after it was found out that three of the alleged executives representing 3Key had no digital presence whatsoever, indicating that the company may not be entirely genuine.
Putting the 3Key Deal on Hiatus
Pushing a dodgy company in the eyes of hundreds of millions of soccer fans could prove a dangerous precedent, prompting City to temporarily revisit its alliance with the entity. However, it also raises another red flag, and particularly how diligent companies are when conducting their background checks prior to striking partnerships with companies in the crypto space.
Often not fully regulated, if at all, crypto firms have been entering the world of sports at a quick pace. Crypto.com purchased the naming rights for the Staples Center in Los Angeles for a whopping $700 million.
Worrying in the case is not only City’s apparent nonchalance towards the lack of transparency in the matter, but also the fact that it was fans who did a rudimentary search to establish that 3Key lacked any consistency in their reported corporate structure, prompting the sudden divorce last Friday.
Manchester City released a statement in which it confirmed that it would need to conduct further research into the company, and while that lasted, it would need to temporarily suspend all partnerships until after further checks are completed:
“Prompted by the club’s interactions with 3Key Technologies in recent days, Manchester City is now conducting further inquiries regarding 3Key Technologies, and the partnership has been suspended pending satisfactory resolution to all of those inquiries.”
Fans Are Not Hot on Token Partnerships in Soccer
There seems to be growing and justified discontent towards partnerships that involve NFTs or fan tokens. According to the Football Supporters Association, fans often feel “taken in” by such initiatives, as clubs seemingly rely on fans spending on paraphernalia that adds no real value to the fan experience.
Socios.com has been the leading platform in those matters, but also the most credible one too. The company has been able to enter the world of soccer from a completely different angle, offering a collectible trade card game instead of pushing its offer too aggressively or being linked to gambling.
The company has established deep roots with some of the world’s soccer elite, including becoming the official engagement partner for La Liga and rebranding Argentina’s Primera Division to Torneo Socios.
Many soccer clubs have been opting for gambling partnerships as they usually allow clubs to stay competitive and generate additional revenue they need to scale or maintain operations. Overreliance on gambling sponsorships has become a hot talking pot between legislators and regulators, with the British public, for one, generally disapproving of those.
Most recently, we reported that Fulham FC signed a partnership with Asiabet33, becoming the official betting partner of the team for the Asian market throughout 2021/2022. With the onus now falling on clubs to “clean up” their act, crypto companies are slowly taking over advertisement space and sponsorships space. However, due diligence is always advised.