Crypto Winter Sending Shivers Through Formula 1 Lanes

Crypto sponsorships took a huge leap into the world of sports in recent years, getting involved with global sporting brands and organizations. Crypto.com, for one, sponsored the World Cup in Qatar, is an official sponsor of the UFC, and took the naming rights of the LA basketball stadium shared by the LA Lakers and the LA Clippers.

Tezos took its business and inked deals with Ferrari, Manchester United, McLaren and several others. FTX signed deals with one of the best teams in Formula 1 in Mercedes, changed the name of legendary Miami Heat stadium, naming it the FTX arena, and took on Tom Brady as a brand ambassador. 

But the crypto winter has continued and found its way into the sporting world and into Formula 1. The first team to feel the chill was Mercedes with FTX, which was soon followed by FTX filing for bankruptcy. Ferrari followed with Velas and it was believed to be because of a compliance issue. And now Red Bull has parted company with Tezos, and Fantom was removed as Alpha Tauri’s backer, disappearing from their website’s list of sponsorships.

Mercedes

The first big change came last year when Mercedes removed FTX branding off its Formula 1 car following the cryptocurrency exchange’s collapse. The termination cost Mercedes a large sum of $15 million. This FTX collapse was then followed by the arrest of their boss, Sam Bankman-Fried.

FTX was taking the world of sports by storm as it had sponsorship deals everywhere. The Miami Heat basketball stadium was renamed to “FTX Arena” in a deal that was reportedly worth $135 million. And they sponsored the American Baseball league (MLB).

Ferrari

The news of Ferrari splitting with their cryptocurrency backer Velas Blockchain was news to many. Ferrari was meant to get $30 million in this upcoming year, per their contract. The deal was aimed mainly at fan engagement through NFTs and several other ways.

Scuderia Ferrari decided to terminate its multi-year partnership deal that started in 2021.The total loss is said to be around $55 million. The cause of the fall out according to RacingNews365 was the lack of compliance with the stipulations that allowed Velas to create NFTs. It is also reported that the two parties are looking into taking action against each other.

Red Bull

This termination was different, as the crypto company ‘Tezos’ is the one that severed the ties with the current F1 champions in Red Bull. When asked about it, Chief commercial officer of Tezos foundation, Mason Edwards said, “The Tezos Foundation decided not to renew its agreement with Red Bull Racing as it was no longer in line with its current strategy.”

The end of this partnership does not mark the end of Tezos’ existence in the Formula 1 world, as they have a multi-year deal with another constructor in McLaren Racing. The Tezos platform also signed a $27.2 million deal with the European giants Manchester United too. This blockchain company seems to be holding its own amidst the crypto winter.