NWSL crypto sponsor Voyager files for bankruptcy
- NWSL players were to receive part of the deal in cryptocurrency
- Voyager blames ‘prolonged volatility and contagion’ in market for Chapter 11 filing
Cryptocurrency platform Voyager Digital has filed for bankruptcy, casting doubt on several sports sponsorship deals.
Voyager has signed a number of high-profile partnerships in 2021, including with the Dallas Mavericks of the National Basketball Association (NBA), Nascar Xfinity Series driver Landon Cassill and former National Football League (NFL) ace Rob Gronkowski.
The American company also announced a multi-year deal with the National Women’s Soccer League (NWSL), which included players getting a share of the deal in crypto. Additionally, Voyager was to provide league players with crypto financial education to help develop opportunities for long-term financial growth.
But Voyager now finds itself the latest victim of the crypto market crash. The platform had suspended all withdrawals and exchanges last week. He said “prolonged volatility and contagion” in the market forced its Chapter 11 filing, which protects the company from creditors, while allowing it to remain operational and pursue strategic alternatives.
In its bankruptcy filing, New Jersey-based Voyager estimated it had more than 100,000 creditors and between $1 billion and $10 billion in assets and liabilities of equal value.
After peaking at US$3 trillion last November, the cryptocurrency market has fallen below US$1 trillion, with the decline compounded by the collapse of stablecoin TerraUSD in May.
This has seen crypto-focused hedge fund Three Hours Capital struggle, compounding Voyager’s problems. The company said it issued a notice of default to the Singapore-based firm last week for failing to make required payments on a 15,250 bitcoin (about $324 million) and $350 million loan. USDC stablecoin dollars.
Later that week, Three Hours Capital filed for Chapter 15 bankruptcy, which allows foreign debtors to protect U.S. assets from creditors.
The “crypto winter” continues to bite. Last month, bitcoin fell below US$21,000, marking its lowest level since 2020. Franchises such as the Los Angeles Angels and Washington Wizards also reportedly lost major sponsorship deals.
It’s not yet clear what Voyager’s situation means for its various partnerships. But after promising so much, including one of the NWSL’s biggest corporate sponsorships in its history, it seems hard to see these deals continuing in their current form.
Calls for regulation of crypto sports sponsorships are likely to be further fueled. Organizations such as the NBA and the Los Angeles Lakers, which have struck deals with Coinbase and Crypto.com respectively, may also be feeling jitters after massive layoffs at both companies. Iqoniq, whose partners included LaLiga, Crystal Palace and McLaren, went into liquidation in January.
Crypto deals have provided many short-term gains for sports properties. But market volatility is a reminder of the need for long-term planning.