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F1 Ferrari Team Breaks Ties with Crypto Firm

red image of Velas Scuderia Ferrari with crypto coins bordering
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The racing unit of luxury automaker Ferrari, part of the 2023 Formula One World Championship, has terminated its contract with the cryptocurrency sponsor, Velas, causing the F1 Ferrari team to lose backing worth millions of dollars before the start of the season. The news came just a month before the pre-season testing.

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F1 Ferrari and crypto sponsors split up

Scuderia Ferrari partnered with the Velas blockchain firm in 2021. The deal assigned a yearly amount of $30 million to boost fan engagement via different initiatives, including non-fungible tokens (NFTs). It was a multi-year arrangement, but now Ferrari has broken its ties with the blockchain firm.

The partnership lasted only a year, as neither party would renew their alliance. According to some sources, the team was non-compliant with the clauses that permitted Velas NFT creation.

Furthermore, chip manufacturing company, Qualcomm Snapdragon, won't be part of Scuderia's sponsors. Following the splits, the logos of both these companies will be removed from Ferrari's partner list for the 2023 Formula One Championship.

The end of the partnership has also resulted in heavy losses for the racing team. The Italian squad has to bear losses of around $55 million.

Teams cutting ties with crypto firms

It is not the first time an F1 team has ended its partnership with a crypto company. Various automakers are also hesitant to work with blockchain firms.

Earlier, Mercedes withdrew from its deal with the cryptocurrency exchange FTX. It was after the exchange filed for Chapter 11 bankruptcy. Red Bull's racing team also ended its association with the Tezos Foundation because of the misalignment of strategies between the two firms.

Web3 projects and crypto firms have been a part of sports events for some time. Crypto.com was also one of the sponsors of the 2022 FIFA World Cup, but it gained little traction from the partnership. The market going through a crypto winter may affect these partnerships, further aggravating the bear run.

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Author: Wasay Ali

Author: Wasay Ali

Wasay Ali is a versatile professional writer with global experience and a background in mechanical engineering and social science. He is adept at crafting news and informational content for the crypto space and has experience writing for other niches. He is a professional SEO content writer who has worked with several digital marketing agencies and clients in the US, UK, Pakistan, and Europe. He is a dedicated volunteer and enjoys reading, writing, poetry, and going to the gym. He is an INFJ-A personality type dedicated to positively impacting the world. Wasay has a passion for writing as it allows him to express his creativity, share his knowledge, and connect with people worldwide.

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