If there’s one thing we know about cryptocurrencies, it’s that celebs love them. We’ve written about rapper Ghostface Killah’s unsuccessful efforts to launch his own cryptocurrency, and we also mentioned how boxer Floyd Mayweather & music impresario DJ Khaleed managed to get themselves sideways with the SEC due to their involvement in touting some ICOs on social media.
Now Spencer Dinwiddie of the Brooklyn Nets has entered into the crypto game with his SD8 coin offering. This excerpt from a recent Forbes article explains what he’s up to:
After nearly three months of delays, including a threat from the NBA to ban him from the league during negotiations, Brooklyn Nets point guard Spencer Dinwiddie plans to launch his token-based investment vehicle on Monday in conjunction with a bid to get selected to his first career All-Star Game.
I reported in October that the 26-year-old planned to launch DREAM Fan Shares, a blockchain-based investment platform, where he’ll sell 90 SD8 coins that will enable Dinwiddie to collect up to $13.5 million of his guaranteed three-year, $34 million contract upfront, as a business loan. But Dinwiddie ran into some disagreements with the NBA about this first-of-its-kind initiative, which he outlined over the phone on Sunday as Brooklyn arrived in Orlando for a game the next night against the Magic.
The third year of Dinwiddie’s Nets contract is a player option for just over $12.3 million. And his original tokenization plan called for the possibility of significant dividends for investors if he elected to opt out of the final year of his deal in 2021 and come to terms on a more lucrative contract with Brooklyn or another team. And that is where the NBA had some real issues, according to Dinwiddie.
“Pretty much what they said was that the player option was gambling,” he said, “and that would’ve been cause for termination.”
Dinwiddie ultimately agreed to tweak his coin to eliminate the portion of it that related to his 3rd year player option, and the NBA backed down. While the NBA may not have liked his deal, it appears that Dinwiddie’s trying to stay on-side with the SEC. He’s doing his offering in reliance on Reg D, and will sell the coins to accredited investors only.
-John Jenkins, TheCorporateCounsel.net January 30, 2020
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