Birmingham City was set to become the first football club to enter the metaverse, but fans who invested in the token were left short-changed.
A lack of proper due diligence on the club’s part meant it was entering a partnership with a company with limited to no track record. This eventually resulted in fans being misled, and enormous financial losses for those that invested.
On February 28, 2022, the Birmingham City football club, announced it would be partnering with Ultimo GG, becoming the first English Football League (EFL) club to join the metaverse.
The initial parameters of the partnership outlined multiple goals: creating a digital museum, hosting virtual events, organizing virtual tours, NFTs and club tokens and more.
A recent Twitter thread by author of The Ugly Game – Martin Calladine (@uglygame) – shared a detailed overview of how the deal turned ugly. He shared information about company filings and other evidence of how “the partner was built on fresh air”, as he put it. For starters, Calladine explained that Ultimo had “not much of a track record”.
This was illustrated by screenshots showing how the companies listed on Ultimo’s website either showed very limited activity and/or were dormant for long periods.
The companies in question were part of Ultimo Group – the entity which was supposed to inspire confidence that Ultimo wasn’t a crypto fraud.
Amid Ultimo GG’s executives was Tobias Gooden – the founder of Ultimo – who was accompanied in heading Ultimo GG’s business by his alleged 21-year-old son – Sebastian Gooden.
This was another red flag when it came to establishing a track record for the company, which was founded very shortly before entering the partnership with Birmingham City.
Laying down the foundation by outlining the company’s back story, Calladine also set the stage for expectations about what the outcome of this partnership was. Although the story was served with some sense of humor, the upshot was everything collapsed within a month.
The app never launched its beta version, which was scheduled for March, and the corporate website had been quietly shut down sometime in the summer. The word “fraud” was passed around but Calladine made it perfectly clear that he wasn’t alleging it himself.
The worst part of the story is that anyone who had put their money in the crypto was faced with unreturnable losses. While the crypto market can be very volatile, if a coin is not abandoned, there’s usually at least some chance to make back an investment.
However, the case with Birmingham City’s fans who invested in the crypto aspect of this partnership wasn’t one of those. Calladine said “fewer than £1 of the crypto was traded” in an unspecified period in October, with past figures going above £500,000. This is a clear indication that the crypto is most likely abandoned, with losses of 94%, according to Calladine.