NBA Player Spencer Dinwiddie Taps Broker-Dealer in Push to Tokenize Sports Contracts

The move follows a three-month tussle with the NBA, which initially claimed it represented a league violation.

AccessTimeIconMar 3, 2020 at 4:02 p.m. UTC
Updated May 9, 2023 at 3:06 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

An initiative by National Basketball Association (NBA) player Spencer Dinwiddie to tokenize the value of professional athletes' contracts has engaged a specialist investment bank to manage an upcoming offering.

DREAM Fan Shares (DFS) announced Tuesday it has brought in New York-based Tritaurian Capital, a FINRA-registered investment bank and broker-dealer providing specialized private placement expertise, to help facilitate the company's inaugural offering in securities linked to athletes' earnings.

  • Solana Passes Ethereum on DEX Volume
    01:15
    Solana Passes Ethereum on DEX Volume
  • Colorado Securities Commissioner Addresses Crypto Projects Who Raise Capital via Tokens
    14:55
    Colorado Securities Commissioner Addresses Crypto Projects Who Raise Capital via Tokens
  • Three Major Ethereum Stories to Watch in 2024
    02:12
    Three Major Ethereum Stories to Watch in 2024
  • EigenLabs CEO on Building Decentralized Trust Network
    01:53
    EigenLabs CEO on Building Decentralized Trust Network
  • "We are happy to announce the engagement of Tritaurian Capital for the upcoming SD26 offering," DFS said in an email made public by journalist Roy Katsiri on Twitter earlier today. "We believe they are the best suited team to help bring this emerging asset class to market."

    DFS and Tritaurian Capital did not immediately respond to requests for comment.

    DFS will offer ethereum-based tokens linked to shares in the contracts, beginning presumably with Dinwiddie's. The NBA player has previously said he wants to tokenize his three-year contract, worth a total of $34.5 million, and sell to investors for a lump sum.

    "DFS leverages guaranteed contracts and the potential for performance-based bonuses and other contingent bonuses to structure debt securities represented by PAInTs [Professional Athlete Investment Tokens], giving accredited investors the opportunity to invest in securities tied to the financial success of athletes, artists and influencers," reads DFS' website.

    It's unclear whether the contracts of other sports players will be included in the initial token offering, which will only be available to accredited investors at a minimum $150,000 buy-in. DFS says plans to tokenize securities based on the contracts of artists and social media influencers are also in the pipeline.

    A player for the Brooklyn Nets, Dinwiddie first outlined his intentions to tokenize his own contract back in September, even partnering with custodian Paxos Trust Company. Days later, the NBA said this was in violation of the league's collective bargaining agreement, which outlines how athletes are employed by their respective clubs.

    In January, Dinwiddie reached a compromise with the NBA where instead of paying out dividends, as originally intended, he would issue a flat bond, which would offer no accrued interest. At the time, the NBA said it was reviewing the modified agreement and refused to say whether it had fully signed off on the sale.

    Established in 2001, Tritaurian provides expertise in both traditional finance as well as with blockchain technology. The bank claims it was the first non-ATS broker-dealer licensed to sell digital private placements that use blockchain back in July.

    DFS has so far not provided a timeframe for when it expects the token offering to launch. "[G]iven the novel structure of this project, we are taking the appropriate time and precautions to make sure we establish a conservative approach for this launch," the company said in its email Tuesday.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.