Binance Terminates AFA Partnership Over Contract Breach

Binance has terminated its five-year partnership with the Argentine soccer association, AFA, after just one year, citing a breach of contract. The decision came as a blow to the soccer governing body and raised questions about the exchange’s ongoing regulatory challenges.

Binance has terminated its five-year partnership with the Argentine soccer association, just after a year, citing a breach of contract. The move comes at a time when Binance is cutting staff and employee benefits. In January 2022, Binance became the main sponsor of Argentina’s…

— Wu Blockchain (@WuBlockchain) July 18, 2023

Binance Exits AFA Deal

In January 2022, Binance had become the main sponsor of Argentina’s prestigious national soccer team and the naming sponsor of its national soccer league under a five-year deal. However, controversy surrounded the agreement, as AFA unilaterally terminated its contract with fan token site Socios to sign with Binance. This led to a legal battle, with Socios suing AFA, although the company continued to be the exclusive provider of AFA’s official fan token, $ARG, until 2026.

The recent bear market and regulatory crackdown in the cryptocurrency industry have taken a toll on Binance’s profitability. The exchange reportedly stopped offering certain benefits to its employees due to declining profits. Additionally, in response to mounting regulatory and legal challenges globally, Binance laid off over 1,000 workers, and there were speculations of further cuts, potentially affecting more than a third of its previous 8,000 employees.

The situation worsened when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance, Binance.US, and its founder Changpeng “CZ” Zhao in June. The SEC alleged that the companies operated as an unregistered securities exchange, broker, and clearinghouse, allowing U.S. customers to buy and trade certain cryptocurrencies that the regulator deemed unregistered securities.

In light of these challenges, Binance decided to evaluate its partnerships worldwide, and in a Spanish-language statement posted on Twitter, the company stated that AFA failed to fully comply with its contractual obligations. Binance’s principles and values were evidently compromised, leading to the termination of the partnership.

The abrupt end to the collaboration has left AFA searching for a new sponsor for its national soccer team and league. Meanwhile, Binance continues to grapple with regulatory scrutiny, requiring strategic decisions to navigate the evolving crypto landscape and regain stability.