Cryptos and exchange platforms in the eye of the storm, F1 teams affected
Since the contract termination between Mercedes and the cryptocurrency platform FTX, let's look back at the various partnership cancellations linking the crypto world to Formula 1 teams and the reasons behind this distancing.
As quickly as they entered the flagship category, cryptocurrencies seem to have moved away from it just as quickly.
FTX, figurehead, sunk
Mercedes was the first to terminate its sponsorship agreement with the crypto company FTX during the Grand Prix of Brazil, last November. This announcement came as a result of the platform’s sudden liquidity crisis, which led to its bankruptcy and subsequently caused a decline in the cryptocurrency market.
Toto Wolf, director of the Mercedes team, then expressed his surprise at this situation: “We considered signing an agreement with FTX because they were one of the most credible, solid, and financially healthy partners that existed,” commented the Austrian.
« We can see that a cryptocurrency company can be brought to its knees and disappear in a week, which shows how vulnerable the sector still is. It is not regulated and I believe it should be, because there are numerous clients, investors, and partners like us who have been left in complete disbelief by what has happened.
»
Red Bull, Ferrari and AlphaTauri are following.
Subsequently, conjectures had started to emerge about the agreements of the other Formula 1 teams with cryptocurrency companies.
Suppositions that were confirmed just before the end-of-year holidays, with Red Bull witnessing the cryptocurrency Tezos withdrawing itself as explained by Mason Edwards, the commercial manager: “The Tezos foundation has decided not to renew its agreement with Red Bull Racing, as it no longer aligns with our current strategy.”
Despite this announcement, the foundation is still connected to the McLaren team, while the Austrian team continues to have its partnership with the cryptocurrency company: Bybit.
For a reminder, this is the biggest cryptocurrency sponsorship contract in Formula 1 history with a 150 million dollar agreement.
A few weeks later, it was Ferrari’s turn to suspend its multi-year collaboration with Velas Network AG, one of its most important sponsors, which could have been visible in 2022 on the rear wings of the red cars. A financial loss of 30 million euros, but compensated by the arrival of Genesys, a global leader in customer experience, allowing companies to deepen customer connection through cloud and digital technologies.
Finally, recently, after the top teams, it’s AlphaTauri who followed suit by removing the Fantom from the list of its partners.
We are pleased to announce the arrival of a new Team Partner: @Genesys.https://t.co/Jk0ERSFog6
Welcome to the family! 👊 pic.twitter.com/DBFsKuNiXg
— Scuderia Ferrari (@ScuderiaFerrari) January 12, 2023
F1 and cryptocurrency, is the divorce finalized?
In 2022, all teams had an agreement with one or more cryptosponsors from the blockchain. A year and a half ago, the F1 championship also signed a sponsorship contract worth 100 million dollars with the Crypto.com exchange platform.
However, for several months now, the world of cryptocurrencies has been in great difficulty and trust as well as commitments are dwindling.
Finally, the ecosystem of crypto assets remains true to its image, that of a controversial and volatile environment. There are several major decisions in the weeks to come at the political level in France and Europe that will determine whether or not to secure cryptocurrency exchange platforms and therefore the sponsors of Formula 1 teams.
