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NBA says Dinwiddie cannot use his contract as a vehicle for investments

Manu Naik

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NBA Dinwiddie

Earlier this week, star Nets player, Spencer Dinwiddie, announced that he had planned to turn his contract worth $34.4 million into an investment, going public with an SD8 token offered by his company, DREAM Fan Shares. On Friday, however, a league official confirmed that the NBA notified Spencer Dinwiddie that he could not use his contract as a vehicle for digital investments.

Dinwiddie had intended to raise around $13.5 million from just $5 million by offering the security on the Ethereum blockchain, guaranteeing investors interest of at least a few percentage points over the course of the three-year contract. He’d also planned for the minimum required investment to be $150,000.

NYT Sports journalist, Marc Stein, reported that Dinwiddie plans to meet with NBA league officials to discuss allowing him to go forward with his plan.

As per The New York Times, the NBA stated,

“According to recent reports, Spencer Dinwiddie intends to sell investors a ‘tokenized security’ that will be backed by his player contract. The described arrangement is prohibited by the CBA, which provides that 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 main issue is that selling shares in his contract would enable investors to bet on his performance, and whether or not he would be able to get a better deal after 2 years into the 3-year contract.

Dinwiddie had also announced his endorsement with TRON Foundation and Justin Sun for 8.2 BTC, which he further pledged to give away to charity.

Manu is a full-time cryptocurrency journalist at AMBCrypto covering primarily the US market. A graduate in chemical engineering, his writing is centered around regulation and institutional investment within the cryptocurrency space.