Headline: Is Gronk being zonked by cryptocurrency?

Body:  Ok, usually, I really don’t think about sports at all, and I certainly don’t write about it.  I might catch the odd portion of a football game, maybe a few innings of a baseball game, I really don’t care.  (Sumo wrestling, though?    Yes!!  2 500-Lb. guys in diapers wrestling in mud, with matches scripted a la WWE?    Yes, please)  But I digress.   Usually I won’t write about sports.  That said, this is the exception.  Cryptocurrency has collided head on (almost a targeting call here) with sport.  Rob Gronkowski (hereinafter, Gronk) has been subpoenaed  in a class action suit against owner of the Mavericks, Mark Cuban.


Good question, actually.   It seems that a whole class of people have sued Mark Cuban for promoting a, now bankrupt, cryptocurrency brokerage, Voyager Digital.  They are following in the footsteps of the class who sued a number of celebrities (think Shaquille O’Neal, Larry David and others) for their promotion of FTX.    The suit against Cuban and the Mavericks will follow much of the same logic.    Essentially tying their famous personalities to the  opaque business practices perpetrated a fraud upon investors.  For right now, Gronk has been served a subpoena as a third party and not a defendant, but that could change.  Gronk was a “brand ambassador” for Voyager Digital, and arguably, an important portion of the alleged fraud.  As of July 1, 2022, Voyager has stopped all withdrawals and very soon after, filed for bankruptcy protections.

Why did Gronk get into cryptocurrency?

He was following the lead of long-time friend Tom Brady, who also began to promote cryptocurrency.    Companies in the space are hoping to use Gronk to promote the idea that cryptocurrency is for everybody.  To this end, he will make a series of commercials featuring Gronk working out with a dog on his back (a la many TikTok videos.)  Eventually, Gronk will be selling off some NFTs to help support his children’s charity.  Previously, Gronk has offered NFTs to memorialize his greatest SuperBowl moments.  Events continue, as Tom Brady has started a company to mint NFTs related to other world-known athletes.  Even Coinbase is getting in the action, as they partner with the NBA to be the “exclusive cryptocurrency platform partner” of the NBA.

OK, but is it just the U.S.?

No, the craze appears to have gone worldwide.    After one particularly significant bout, English boxer, Tyson Fury minted an NFT and sold it for just less than one million dollars.  In Europe, there are several  soccer players who have their own NFTs.   But, even more interesting, even the fantasy sports “atheletes” have NFTs.  Adidas began minting their own NFTs and buyers will be able to use proprietary wearables.   Some soccer clubs in Europe have even offered NFTs that allow the buyer to vote on issues important to that club.  This binge has even stretched to Africa.   South Africa is beginning to mint NFTs related to their rugby players.

This all sounds GREAT!!

Yeah, no.  This mass-adoption of NFTs is not without issue.  Several large soccer teams in Europe have had to cancel agreements with cryptocurrency firms.   Meanwhile, Spanish soccer star Andre’s Iniesta was warned online by Spanish officials that there are risks when people promote unregulated products.

The Verdict

The first to fly through the air in a powered conveyance were the Wright Brothers.  Just a few decades later, there were some rather substantial companies offering flights that went between continents.  But, a significant issue that these young airlines faced was marketing.  Flying was seen by many as very risky  Even though that airplane could deliver you to California in less than 6 hours, it could also conceivably blow up on landing, or have an engine flame out midflight, according to the public  The airlines had to launch a very diligent and deliberate marketing campaign to explain to the public that their airplanes were very safe, and were even safer than the cars that they loved so much.  To be warmly embraced by the public, cryptocurrency firms and groups minting NFTs  really have to explain to members of the public the value of their products.   This is especially tricky for cryptocurrency and N/FTs.   An airplane you can see, touch even (If you can outrun Security.)  Cryptocurrency and NFTs are nothing but ones and zeros, so they have a much more comprehensive task of explaining to investors how their “product” has value.  A case has to be made forcefully, and I don’t think anybody has gotten closer than NBA TopShot.  All others might learn a thing or two from their example.   Just don’t watch the NBA representatives eat.   They are always dribbling.






Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

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