CryptoCom has backed out of a $495-million sponsorship deal with Union of European Football Association (UEFA) Champions League. CrypoCom cited regulatory problems it is facing in some European markets that may hinder its trading and others services as the reason for pulling out of the deal.
The cryptocurrency company offering trading, DeFi, and wallet services, among others, was to replace Russian oil company Gazprom as the sponsor for the next five seasons till 2027. UEFA abandoned the deal with Gazprom in March after Russia’s invasion of Ukraine. According to media coverage, CryptoCom is experiencing legal and regulatory problems in trading and operations in the UK, Italy and France.
The decision to back out of the deal in the last minute appears to be triggered by the current bear market which has seen up to $2 trillion of market value lost in the last six months. According to market observers and analysts, cryptocurrency firms have spent $2 billion in sports sponsorship deals so far. The big question is if they can persevere with these big investments amid the market downturn.
However, the market downturn doesn’t seem to have ebbed CryptoCom’s appetite for more investments in sports. In August, it announced an expensive investment plan to remodel the CryptoCom Arena. Last month, it received approval from the Financial Conduct Authority (FCA) in the United Kingdom to operate. Similarly, registration and license were granted it by South Korean authorities to operate in the country. It also received licenses to operate in Italy, Cyprus, Singapore (in-principle), and Dubai (provisional) in the last two months.
In November 2021, CryptoCom purchased the naming rights of the Staples Center in Los Angeles for 20 years at $700 million. It is now called CryptoCom Arena. In March, the company signed a multi-year sponsorship deal with Aston Martin Cognizant Formula One Team and in June it also signed a five-year sponsorship deal with Formula 1. The platform also paid $100 million to Hollywood star Matt Damon for a TV commercial.
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