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So it’s been a year writing Sporting Crypto.

Time really does fly.

12 months and 1750 subscribers later, Sporting Crypto has become the biggest Web Sports content stream, which is awesome.

It’s become a large part of my working week, every passing edition, and is read by execs and leaders at the NBA, MLB, Premier League, UEFA, FIFA, Government bodies, Crypto exchanges, Web3 Sports companies, VC funds and so much more.

What was once a place to simply put my thoughts down on paper has become a media asset that drives a lot of value to both writer and audience.

I’m very grateful for everyone’s support along this journey. Here’s hoping that 12 months down the line, we’re talking about 10,000 subscribers, and whatever else Sporting Crypto becomes.

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This Week’s Deep Dive: Crypto.com Pull out of UEFA deal and FIFA Launch NFT Platform Ahead of World Cup

Two of Soccer’s (it pains me to say that word, but I want to clarify the sport) biggest organising bodies have both been in the headlines this week due to Web3 deals or planned launches.

Let’s start with UEFA — who governs football, futsal and beach soccer in Europe.

According to reports, Crypto. com, one of the world’s largest crypto exchanges were close to landing a ~$500m sponsorship deal over five years, to replace Russian energy sponsor Gazprom after UEFA severed links due to the ongoing war in Ukraine.

Crypto. com hit 50m users globally in 2021.

They sponsor an array of sporting assets, including deals with F1, the Ice Hockey World Championship and the 2022 FIFA World Cup in Qatar.

They also have naming rights for the LA Clippers & Lakers home court and multi-purpose arena, the formerly named Staples Arena, now of course — the Crypto. com arena.

They were one of the fastest growing companies in the world during that 2021 — like many of their crypto counterparts.

But the market downturn meant that, like many crypto companies, Crypto. com had to make a lot of staff cuts. In June 2022, Crypto. com cut almost 5% of its workforce totalling almost 260 people.

According to many reports, Crypto. com had been quietly laying off employees since June — meaning the total is likely a lot larger than that.

This isn’t nice…but it’s normal, and I’ll explain why. 

Crypto exchanges rely largely on trading to drive revenue, but they also make money through leverage, lending and also institutional activity as well — alongside a range of other products and offerings.

Bull markets cause a surge in activity that requires an abundance of manpower, so exchanges are often in between a rock and a hard place.

If you don’t hire; developers, product people, marketers and most importantly customer service staff — they lose customers, and actually, struggle to service the ones you already have.

So they have to staff up.

Because crypto is cyclical, it means when there’s the down part of the cycle, there are fewer users and therefore just less to do. Hence the layoffs.

This is basically like Zoom hiring a ton of people during the peak of the pandemic and then having to operate meaner and leaner when people were allowed to go outside.

Imagine that, but every 2-4 years.

But finances were not the reason Crypto. com pulled out of the deal.

There were actually regulatory concerns, according to Sport Business who broke the story.

I’m slightly surprised, but also…not really surprised.

The reason I’m surprised is that Crypto. com, in August 2022, received regulatory approval from the Financial Conduct Authority (FCA) in the UK as a registered cryptoasset business. This is very difficult to do because there is such a huge backlog of applications and so many AML checks that need to be adhered to.

UEFA are the European governing body for football, and the European landscape right now from a regulatory perspective is very sketchy.

Portugal for example is very friendly to crypto, even making it a tax shelter for crypto entrepreneurs. They then reneged on that promise…then brought it back.

France have had a plethora of successful crypto upstarts that have gone on to be incredibly successful, such as Ledger and Sorare. Macron and government officials have been outspoken in their support for the nascent space.

Rishi Sunak announced, when he was still Chancellor of the UK, that he wanted to make it a cryptoasset hub in Europe. He has just lost a Tory leadership vote to Liz Truss, who in 2018 said something along the same lines.

But the issue is, signing a five year deal when regulation is so scattergun, archaic and not progressive for the most part, is a risk.

And cryptoasset regulation isn’t actually a big priority for many European countries — many of whom are going through huge difficulties with the energy crisis and rising inflation.

With finances not as plentiful as they are in a bull market, and already so much money tied up in other marketing deals, Crypto. com are probably right to hold off until there is clearer regulatory guidelines for cryptoassets in Europe.

From one Soccer body to another

FIFA, the international governing body of association football has developed an NFT platform with their blockchain partner Algorand.

The platform is called FIFA+, and it will offer digital collectables of the greatest game moments of FIFA World Cup history.

It’s preparing to launch FIFA+ in late September 2022, and the digital collectibles will represent memorable moments from games from both the men’s and women’s tournaments.

FIFA’s Cheif Business Officer Romy Gai said: 

I think he’s right, to an extent.

Football is global. And Media has made football brands global.

Everyone loves jerseys, but there is something about digital collectibles that are very interesting to consumers.

They don’t take up space, but you can still prove your fielty and loyalty to a nation or team.

They don’t rip and tear and you can always showcase them.

I do think that there’s more of a collecting culture ingrained in America and American sports, but at the same time Panini is or was a $1bn a year revenue company…

So the market for digital forms of collecting is huge, you’d think, even if many projects in the space have crashed and burned.

One of the most interesting things to me, and this is quite nerdy, is how well a platform using a chain like Algorand does. The blockchain is an alternative to more well known counterparts like Ethereum, Polygon and Solana. But Algorand’s volumes in the NFT space aren’t huge.

In August that volume was just over $2.5m.

Compare that to OpenSea, who finished July 2022 with over $500m volume in just Ethereum based NFTs.

So for Algorand, this is a big deal. This is by far the biggest client using the chain, and they’ll need to hope their technology is robust enough to deal with volumes that are very much likely to be larger than $2.5m.

Money makes the world go round

I predicted that crypto sponsorship in sports would not go away even with a big crypto crash, simply due to the amount of cash some of the household names have.

So it’s not at all surprising to me that the Crypto. com x UEFA deal was in the works.

And it’ll be really interesting to see if they use that money elsewhere, or if they come back when regulation is clearer. Right now, it’s as clear as mud. In the UK and more broadly in Europe for cryptoassets.

With FIFA, I’d be interested in seeing just how commercially driven this deal is for them. Alogrand will have had to pay them a fair bit of money to become an exclusive Web3/Blockchain partner — so you’d think FIFA are less concentrated on revenue here.

The opportunity for something more accessible or even free could be really interesting, and probably and win for Algorand as a chain as well, if enough people open up native wallets.

These are two things to keep an eye on, for sure.I definitely think this won’t be the last time you see either of these headlines in Sporting Crypto.

More sports crypto stories & things to put your radar

• Ticketmaster has teamed up with Dapper Labs to launch NFT tickets on the FLOW blockchain. This is definitely going to be a topic at some point for the newsletter, but I want a bit more time to do some research on ticketing.

• RTFKT continue to break new ground in this space — with their physical merch drop.

• Stake. com, Everton’s crypto gambling sponsor, have been hit with a $400m lawsuit. 

• Crawley Town’s owners, WAGMI United, wanted NFT holders to pick their starting XI. Which is crazy, and fans absolutely hated it.

• Noah continues to create some of the best Dune dashboards when it comes to looking at brands doing NFTs. 

Great reads, great tweeting and more general ‘stuff’ that could impact you

• Crypto YouTubers are cashing big cheques whether the market is up or down. 

• The Ethereum merge will finally stop the rhetoric around environmental concerns when it comes to NFTs. 

• Great thread by Lex here. 

• PROOF has raised $50m led by a16z!

Thanks for reading the latest edition of the Sporting Crypto newsletter. I’m really happy to see so many people enjoying it and sharing it with their networks. If you enjoyed this, please tell your friends who might be interested - and share it on social :)

This newsletter is for informational purposes only and is not financial or business advice.These are my thoughts & opinions and do not represent the opinions of any other person, business or entity.