Qhubeka Nexthash Funding Debacle

[jake_m]

CyclingTips just put up a nice longform investigation on the cryptocurrency sponsor that left Qhubeka/Dimension Data/NTT in the lurch at the end of last year. As someone who always enjoys reading about a con, I found it really interesting stuff. For the F1 fans out there, reminds me of the Haas/Rich Energy scheme from 2020. Of course, sponsors overpromising and underdelivering seems like a tale as old as time...

https://cyclingtips.com/2022/01/sex-...e-of-nexthash/

[Louis]

Originally Posted by jake_m

Of course, sponsors overpromising and underdelivering seems like a tale as old as time...

True, but anything relying on crypto funding would IMO be particularly volatile.

[jake_m]

Originally Posted by Louis

True, but anything relying on crypto funding would IMO be particularly volatile.

A poorly timed Elon Musk tweet taking down a WT team would be a sight to see! On the other hand I do find it hard to fault the Qhubeka management here, if it was my back against the wall I’m sure I’d take whatever dodgy offers I could find, too...

[verticaldoug]

Originally Posted by jake_m

A poorly timed Elon Musk tweet taking down a WT team would be a sight to see! On the other hand I do find it hard to fault the Qhubeka management here, if it was my back against the wall I’m sure I’d take whatever dodgy offers I could find, too...

Actually, it is really easy to fault Qhubeka management here. They are a charity. They set up a UK entity for transparency and to help fund raise.

As such, they have very explicit Anti-money laundering obligations as well as anti-terror financing obligations. A simple check would have turned up so many red-flags.

For a charity, reputation is everything, and it's a complete failure of duty in my opinion.

[jake_m]

Originally Posted by verticaldoug

Actually, it is really easy to fault Qhubeka management here. They are a charity. They set up a UK entity for transparency and to help fund raise.

As such, they have very explicit Anti-money laundering obligations as well as anti-terror financing obligations. A simple check would have turned up so many red-flags.

For a charity, reputation is everything, and it's a complete failure of duty in my opinion.

Yeah, laundering money would be bad, so it’s a good thing they didn’t get any!

In all seriousness, your point about Qhubeka’s reputation is a good one, although from the article it seems that they are a named sponsor of the team without contributing funds (part of the “Africa’s team” premise) so I think there’s at least a fiscal distinction between management of Qhubeka the team and Qhubeka the foundation.

[verticaldoug]

Originally Posted by jake_m

Yeah, laundering money would be bad, so it’s a good thing they didn’t get any!

In all seriousness, your point about Qhubeka’s reputation is a good one, although from the article it seems that they are a named sponsor of the team without contributing funds (part of the “Africa’s team” premise) so I think there’s at least a fiscal distinction between management of Qhubeka the team and Qhubeka the foundation.

This is true, but for charities this is the oldest scam in the book in the US. A scammer sets up a charity with a name that is very close to a legit charities name hoping to prey upon people wanting to donate.

Here, the scammer Nexthash was trying to make themselves appear more legit by being associated with someone reputable. The really scam here may be on the number of people defrauded by the Nexthash website...I'm just saying a little due diligence would have turned up red flags.

[.RJ]

Originally Posted by verticaldoug

I'm just saying a little due diligence would have turned up red flags.

Its a shame that this is so common in cycling. Dodgy sponsors, missed wages, archaic team structures. No surprise that a bunch of American world tour pros have come back to the US to run privateer programs.

Maybe one day the sport will grow up.

[Clancy]

I read the article but for me way, way too many dots to connect. I found the article mostly repeating itself and lots of vague tie-ins back and forth. Very confusing. The only thing I got out of it is that Nexthash seems to be shady, has a shady history, and did not meet its financial obligation to Qhubeka, or maybe it did but only partially or maybe it was never communicated or…… CT does very good, in depth articles, more than most publications. But this article left me with glazed over eyes.

The other note is that pro cycling exists with very shaky and dubious funding. But we’ve known that forever. My goodness, where do we think the money comes from for teams like Astana, UAE, Bahrain?

I wonder what kind of “financial funding” is involved at the Pro Continental and Continental levels? Now that’s an article for CT to explore.

Pro cycling sponsorship and financing model is a mess. Nexthash didn’t cause that instead the UCI’s structure allowed the conditions for Nexthash’s involvement. With nothing changing within the UCI, there most certainly will be more stories like this for CT to explore.


I do feel for Qhuebeka.

[Elefantino]

Read it all the way to the end. It's worth it.

[prototoast]

The Qhubeka team (not the charity) has been a mess for years, and professional cycling is better for them being gone. It brings everyone down to have a last place team peddling scammy sponsors. Seems there were enough red flags with nexthash that the team should have walked away, but you don't get to be the worst team in pro cycling by making good decisions.