In brief
- NBA star Spencer Dinwiddie has announced a partnership with a new broker-dealer to help issue shares in his tokenized contract.
- The NBA has remained quiet on whether they will continue to oppose Dinwiddie’s venture.
- Dinwiddie is prepared to move forward without the NBA's blessing and said investors can expect more details soon.
Investors might still have soon have a chance to own a stake in the careers of their favorite athletes and celebrities.
On Tuesday, New York Nets point guard Spencer Dinwiddie confirmed his platform Dream Fan Shares (DFS) will partner with a new broker-dealer to help launch a token offering backed by his NBA contract. DFS will partner with Tritaurian Capital, a FINRA registered broker-dealer and investment bank which specializes in blockchain and digital securities.
“Tritaurian is a registered broker-dealer that has worked closely with regulators over the past several years to understand their perspective on blockchain and cryptocurrency,” read an email sent to prospective investors.
Dinwiddie’s Dream Fan Shares had initially partnered with broker-dealer North Capital Private Securities, but the email did not state whether the firm would remain involved in the security token offering (STO).
Dinwiddie first announced plans in September to issue the first Professional Athlete Investment Token (PAinT), which would tokenize $13 million of his guaranteed $34 million NBA contract. The Ethereum-based “SD8” token, now called “SD26,” would allow him to earn cash upfront from investors and repay them with interest. The token’s name change appears to coincide with Dinwiddie's decision last month to change his uniform number from 8 to 26 in honor of the late Kobe Bryant.
Crypto industry insiders are hopeful Dinwiddie and DFS can become the first successful pioneers of this kind of venture. “I am cheering for Spencer and think that he is one of the most forward-thinking professional athletes out there,” Anthony Pompliano, co-founder and partner at Morgan Creek Digital, told Decrypt. “The mechanism that he is proposing here is not only incredibly smart, but it will likely become the norm at some point in the future.”
The venture had been delayed for months after push back from the NBA, citing a breach of the collective bargaining agreement. But it appears Dinwiddie will move forward with the token offering “regardless of the NBA’s position.”
In January, Dinwiddie told Forbes that, after a back and forth with the league, he would offer the token as a three-year bond which would pay out a base interest of 4.95% on a monthly basis. Furthermore, if all 90 tokens—with a minimum buy-in of $150,000—were sold, the group of investors would stand to collectively earn $2 million in profits.
The offering was previously scheduled for October 2019, and then January 13 of this year, but has since still not launched. The NBA has yet to publicly comment since stating that Dinwiddie's new plan was under review.
According to the latest email, potential investors can expect details “in the near future.” Dinwiddie and DFS said that “given the novel structure of this project” they are “taking the appropriate time and precautions” before launch.