The partnership between Ferrari and Velas was around $30 million per year and was aimed at increasing fan engagement with the help of non-fungible tokens and other activities.
new delhi,UPDATED: Jan 11, 2023 15:38 IST
Ferrari Formula 1 team cuts ties with crypto sponsor
By Emerging Tech Team: The Ferrari Formula 1 team, more famously known as Scuderia Ferrari, has decided to end its partnership with its crypto sponsor ahead of the 2023 F1 season set to kick off in Bahrain on 5 March. The luxury car maker’s racing division joins a bevvy of Formula 1 teams which have cut ties with their crypto sponsors.
Scuderia Ferrari has decided to exit its multi-year partnership deal from 2021 with Velas Blockchain and also microchip manufacturing giant Snapdragon, resulting in a cumulative loss of $55 million for the F1 racing team.
The deal between Velas Blockchain and Ferrari was set at $30 million per year since 2021, and was aimed at increasing fan engagement through NFTS and other activities. However, as per a report by RacingNews365, things fell apart as the team was non-compliant with the stipulations that Velas allowed to create NFTs.
Other loose sponsorships
Back in November 2021, the Mercedes Formula 1 team also suspended its partnership with FTX, after the beleaguered exchange filed for bankruptcy, thereby incurring a $15 million loss.
Also, the current Constructors’ Champion Red Bull Racing’s partnership with Tezos Foundation also met a sad end as the blockchain company decided not to renew its contract with the Red Bull team, citing strategic misalignment. Toto Wolff, the team principal of the Mercedes F1 team, warned other teams could come across a similar situation.
Fallout of the bear market
The situation is similar in the sports industry, where several sports teams have been forced to cut ties with crypto companies due to legal constraints or the companies have not renewed contracts due to the crypto meltdown in 2022.
FTX, which is currently embroiled in controversy, had to cancel its partnership deals with the Miami Heat basketball team for naming rights of the arena. Also, Barcelona Football Club canceled its deal with crypto exchange Ownix after a businessman linked to the company was
arrested for crypto fraud.
Published On:
Jan 11, 2023
