F1 Ferrari Team Breaks Ties with Crypto Firm
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.
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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