Crypto Crash Leaves NWSL Players Empty-Handed As League Considers Cash Payment

The NWSL told its players they might run out of money after cryptocurrency platform Voyager Digital, one of the league’s players biggest partnersfiled for bankruptcy earlier this month.

The league’s Voyager partnership, announced in December, was remarkable in both size and construction. About half of the value of the deal was to be paid to the league in cash, while the other half was reserved for individual athletes to invest in cryptocurrencies through the Voyager platform.

More at

Those accounts were never funded, according to several people familiar with the partnership, and now that Voyager is getting into volunteering Chapter 11, it’s unclear how many, if any, players will actually see. In a letter distributed Thursday to its athletes, the NWSL said there were “no definitive answers at this time on if, or when, player accounts will be funded.”

The letter, which was seen by Sporticoalso indicates that if the accounts are not funded, the league intends to work with the NWSLPA to split some of the money it received from Voyager.

“The Player Fund was always intended to be distributed to accounts at Voyager in cryptocurrency, for the purpose of educating gamers regarding investing in the crypto space,” the letter states. “As such, there was always a risk regarding the volatility of the cryptocurrency market.”

A representative for NWSL declined to comment. Representatives for the NWSL Players Union and Voyager did not immediately respond to request for comment.

The NWSL deal will attract attention in the sports world, where crypto companies have spent a lot of money seeking new customers and market share. For most of 2021, as currencies like Bitcoin and Ether rapidly rose in value, crypto trading platforms and lenders ran a costly Super Bowl advertisingarena caught naming rightssecured jersey adsand rushed to sign crew and league-wide offers. Over the past few months, however, much of the market has collapsed, leading to massive losses for investors and bigger problems for some of the biggest companies in the industry.

The NWSL received its first-year cash payout, according to one of the people, and Voyager’s field signs and website advertising remain active across the league. The crypto company is also a League 10 partnere anniversary celebration, and is still part of this promotion on the NWSL website.

The league might be hoping that fulfilling its end of the deal will help it claim the money owed by Voyager, but it’s likely the NWSL (and therefore its players as well) will be an unsecured creditor, according to Gregory Moffettprincipal at Preti Flaherty Beliveau & Pachios, Chartered LLP, and co-chair of the firm’s creditors’ rights and bankruptcy practice.

“If it turns out that the requirements the debtor must undertake, or the things the debtor must do, are not consistent with his plan to emerge from bankruptcy or to sell or sell the business or whatever either he plans to do, then [the NWSL contract] could potentially be at risk of rejection,” Moffett said in an interview.

Two months before Voyager announced its financial problems, the collapse of a leading stablecoin shook up the industry. More recently, a major crypto hedge fund named Three Arrows Capital filed for Chapter 15 bankruptcy (its assets are frozen and the whereabouts of its founders are unknown), and shortly thereafter, Voyager and fellow lender Celsius Network filed for chapter 11.

The NWSL Voyager deal is different from other league crypto deals because of these funded player accounts. As the women’s soccer league expands its business footprint, it has found a number of new partners eager and eager to directly support NWSL athletes, many of whom also play on the U.S. Women’s National Team and are prominent figures. In July, for example, the league announced a Partnership with CarMax which included an additional $5,000 for each player on the team with the best regular season record.

In a press release published on its website last month, Voyager explained what its bankruptcy could mean for its customers. The company said its cash reserves were both secured and intact in a special type of bank account, and should eventually be available for withdrawal. Crypto in user accounts, however, is unlikely to be returned in full – Voyager said those options will depend on restructuring and the eventual outcome of more than $650 million in claims against Three Arrows, with whom it had a business relationship. The statement did not directly address marketing commitments like its NSWL deal.

The NWSL partnership is likely what’s called an “enforceable contract,” Moffett said, meaning there are ongoing obligations on both sides — payment for Voyager; league marketing exposure. In Chapter 11 proceedings, such contracts are often at particular risk of rejection, he said.

Moffett added that it will likely be a long time before the league has its resolution. There is usually an exclusive window of several months for the debtor to present a reorganization plan, but any subsequent extensions could push this to a year or more.

The NWSL letter also says Voyager has asked the league if they can share an update directly with players. The league says Voyager will send out this update separately. It is not known if this has ever happened.

The best of

Click here to read the full article.