Report: NWSL Players Could Be 'Out Money' After Crypto Partner Files for Bankruptcy

Joseph Zucker@@JosephZuckerFeatured Columnist IVAugust 1, 2022

HARRISON, NJ - JUNE 19:  A  general view of the National Womens Soccer League logo on the scoreboard during the first half of the NWSL soccer game between NJ/NY Gotham FC and San Diego Wave FC on June 19, 2022 at Red Bull Arena in HArrison, NJ.  (Photo by Rich Graessle/Icon Sportswire via Getty Images)
Rich Graessle/Icon Sportswire via Getty Images

The NWSL informed its players they could be adversely affected financially and "out money" due to the bankruptcy filing of Voyager Digital, according to Sportico's Eben Novy-Williams and Emily Caron.

In December, Voyager struck a deal with the NWSL to become the league's official cryptocurrency partner. Under the terms of the agreement, Voyager planned to fund a crypto account for every player in the NWSL.

Novy-Williams and Caron reported Voyager has yet to provide funds for the crypto account and it's not yet clear whether the players will receive the money they were originally allotted.

The Sportico report included a portion of a letter the league wrote to its players:

"The Player Fund was always intended to be distributed into accounts at Voyager in cryptocurrency, with the goal of educating players regarding investment in the crypto space. As such, there was always risk regarding the volatility of the cryptocurrency market."

Amid wider disruption across the cryptocurrency market, Voyager issued a notice of default to Three Arrows Capital in June regarding a loan of around $675 million. Days later, Three Arrows filed for bankruptcy, raising further concerns over Voyager's financial health. The company's own bankruptcy filing followed shortly thereafter.

Pressed on how this was impacting the NWSL, Commissioner Jessica Berman provided few specifics when speaking with reporters on July 14:

Meg Linehan @itsmeglinehan

Said there's an understanding of risk with partnerships of this type, followed up asking about the player fund that was part of the sponsorship and no specifics there yet either. <a href="https://twitter.com/hashtag/NWSL?src=hash&amp;ref_src=twsrc%5Etfw">#NWSL</a>

Novy-Williams and Caron noted the Voyager sponsorship deal was different from how teams or leagues have typically aligned with crypto firms because it outlined the individual payouts to players.

Voyager drew further scrutiny for claiming its consumer accounts were protected by FDIC insurance, which reimburses every account up to $250,000 in the event of a bank collapse.

The Federal Reserve and FDIC issued a joint statement on July 28 demanding Voyager "cease and desist from making false and misleading statements regarding its FDIC deposit insurance status and take immediate action to correct any such prior statements."

Voyager's Risk Disclosure now reads, "Cryptocurrency held on the Voyager Platform is not protected by FDIC insurance or any other government-backed or third party insurance."