Mercedes formula one (F1) team suspended its sponsorship deal with troubled crypto exchange FTX.
Therefore, starting with the Brazilian Grand Prix, the team’s cars will not bear FTX logos. Mercedes stated:
“As a first step, we have suspended our partnership agreement with FTX. This means the company will no longer appear on our race car and other branded assets from this weekend. We will continue to monitor the situation closely as it evolves.”
This decision was reached based on the fast-changing situation, given that FTX filed for Chapter 11 bankruptcy based on a liquidity crisis at the exchange. Moreover, the exchange’s CEO Sam Bankman-Fried resigned.
The FTX saga unfolded several days ago after an 8 billion black hole emerged in its finances. Reportedly, this liquidity crisis surfaced after Sam Bankman-Fried transferred at least $4 billion to Alameda Research, FTX’s trading arm, with part of the funds being customer deposits.
FTX’s downfall is also being linked to Bankman-Fried’s decision to save struggling crypto firms as the bear market continued to bite.
Therefore, the bankruptcy route seemed inevitable, given that Binance halted its FTX acquisition plans, citing misappropriation of customer funds.
The sponsorship deal between Mercedes F1 team and FTX was not all rosy, given that the latter called off this year’s Miami Grand Prix.
Meanwhile, earlier this year, Mercedes team principal Toto Wolff acknowledged that cryptocurrencies could not be ignored because they were part of modern technology because 80% of racing teams in the 2022 F1 grid featured at least one crypto sponsor.
“You can’t shut yourself down to modern technology. It is definitely an area that will grow. They have become a major player in the financial world and obviously seek exposure through Formula 1. We all benefit from it but also learn from it,” Wolff stated.
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