Basketball player Spencer Dinwiddie’s plans to tokenize part of his contract may be in trouble.
The National Basketball Association (NBA) told the New York Times that Dinwiddie is prohibited from converting part of his contract for monetary gains by its terms. “No player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract,” the league stated.
Dinwiddie said he had reached out to league officials to explain the offering. “And they invited me to sit down with them and explain the offering, which is what I’m going to do,” he said. He expressed a similar sentiment on Twitter stating that the contract’s architecture was such that it was not an assignment to a third party.
To recap, Dinwiddie is holding a security token offering for the proceeds from the first year of his contract to raise $13.5 million. The offering, which will begin October 14, is essentially a way for him to earn upfront cash. In return for their money, investors will receive tokens with guaranteed earnings from his paycheck and interest income.
“Now, how much you make depends on how I play. I want to make a bunch of money too, so don’t worry about that. As long as I don’t do anything really, really crazy off the court, everything’s going to be fine, contractually,” Dinwiddie told Fortune. Payouts for the contract will be made in the Pax stablecoin, a coin that trades at parity with the US dollar on Paxos – a cryptocurrency exchange.
While the tokens are valid only for the first season, investors have the option of renewing them for the second and third seasons. The offering is open to accredited investors, or investors who earn upwards of $200,000 or have a net worth of $1 million or more, and has a minimum buy-in of $150,000.
The tokenization of his contract is not the only crypto venture that Dinwiddie is involved in. He also announced a partnership with the Tron foundation to donate 8.2 Bitcoin to charity from the sale of his game-worn shoes for the 2019/2020 season. On top of that, Dinwiddie has already taken to speaking the crypto community’s language.