Spencer Dinwiddie still intends to convert his contract into an investment vehicle despite potentially serious ramifications.
The Brooklyn Nets guard met with the NBA on two separate occasions since the league's September ruling that his digital token initiative is prohibited by the CBA, The Athletic's Shams Charania reports.
While sources said the league continues to discuss the contract conversion with the Brooklyn Nets guard, the NBA has evaluated several variations of the idea and hasn't approved any of them. Dinwiddie, however, reportedly still plans to move forward with launching the investment vehicle and doesn't believe the league has grounds to reject it.
If Dinwiddie launches the digital investment platform without NBA approval, the league could terminate his contract, suspend him without pay, or fine him, according to Charania.
"All of the ideas presented (in Dinwiddie's proposed investment plan) would violate collectively bargained league rules, including rules prohibiting transferring a player's right to receive NBA salary, gambling on NBA-related matters, and creating financial incentives to miss games," Dan Rube, the NBA's executive vice president and deputy general counsel, told Charania.
In their first meeting Oct. 3, sources said the league communicated its concerns about Dinwiddie's salary being used as a third-party transfer, which was the reason for the initial ruling against the arrangement. In a follow-up meeting Oct. 21, Dinwiddie reportedly convinced the NBA of the legality of that part of the investment structure, but another element became an issue.
The NBA now considers the $12.3-million player option in the final year of Dinwiddie's deal a "token" toward gambling, sources told Charania. Dinwiddie reportedly disagrees and considers the player option a performance-based incentive.
The Los Angeles native has made it known that he believes what he's doing is legal.
While the NBA and Dinwiddie are currently in a "standoff," Charania reports that the league still hopes to find common ground.
The proposed plan, which is unprecedented in NBA circles, involves Dinwiddie converting his contract into a digital token called $SD8. Fans would essentially be able to purchase shares in Dinwiddie's contract, while the guard would receive a lump sum up front.
The 26-year-old is currently averaging 18.5 points, 4.8 assists, and 2.4 rebounds for the Nets, who sit ninth in the Eastern Conference with a 5-8 record entering Tuesday's slate of games.