Mercedes Formula One teamed up with FTX cryptocurrency exchange in 2021 to advertise the brand and serve as a global partner. The company’s logo is displayed on the tracks and cars during every race. During the start of the FTX scandal, Mercedes came out singing a different tune compared to the recent one since the crypto exchange filed for chapter 11 bankruptcy.
Mercedes Formula One (F1) team had vowed not to remove the corporation’s logo from its race cars despite the crash that FTX exchange encountered. The firm said that the logo of FTX will still be displayed on the cars driven by George Russel and Lewis Hamilton during the Sao Paulo Grand Prix over the weekend. The F1 team noted that they would closely monitor the FTX saga situation. However, hinting that termination of the partnership is in the pipeline should the case get out of hand. Mercedes noted, “The situation could change in the future should the crypto exchange not solve its liquidity issues.”
The moment FTX suffered a collapse of monumental proportions and applied for chapter 11 bankruptcy, Mercedes did not waste time in announcing that its cars would no longer carry logos of the cryptocurrency exchange. Formula One suspended its sponsorship deal with FTX. The collapse came after a potential rescue deal involving cryptocurrency exchange Binance fell apart. The dissolving of the agreement resulted in the user’s jumping ship and withdrawing billions of pounds in the space of three days, which raised serious concerns over the future of FTX.
The FTX website states, “It is currently unable to process withdrawals and strongly advises against depositing.” Mercedes has officially confirmed that it will no longer promote the FTX brand on its cars. Mercedes Formula One spokesperson said, “As a first step, we have suspended our partnership agreement with FTX.” The spokesperson added, “This means the company will no longer appear on our race car and other branded assets.” The spokesperson also told Racefans, “We will continue to monitor the situation closely as it evolves.”
F1’s interaction with crypto
In September 2021, Mercedes announced that it had formed a long-term partnership with the FTX cryptocurrency exchange, which would span multiple race seasons with the FTX logo featured on cars and drivers. According to former Mercedes F1 boss Toto Wolff, cryptocurrencies are part of modern technology, and the sector will thrive in the future. Wolff noted, “When we are looking back in 10 years, having to make payments that take two days and can’t be done outside of weekly hours, it is going to be a relic of the past. And this is where cryptocurrencies are coming.”
Since then, Mercedes has carried the FTX logo on the nose, cockpit, and rear wing end plates. During the Miami Grand Prix, Mercedes added eye-catching graphics to promote the launch of its range of Non-Fungible Tokens (NFTs) in partnership with FTX. The Formula One Company goes as far as displaying the FTX logo on its driver’s caps and the Paddock. With that being said, Mercedes wasted no time when it came to cutting ties less than 12 months ago. The team removed the logos of another sponsor for a different reason.
At the beginning of 2022, Red Bull’s F1 and Bybit served as the racing squad’s principal team partners, resulting in the $150 million deal. The logo of the trading venue was placed on the outfit and the cars of Sergio Perez and the reigning champion Max Verstappen. In August 2022, Formula One dipped even deeper into the world of crypto by filling two trademarks associated with NFTs and digital assets for the Las Vegas Grand Prix event, which will be held in November 2023. Earlier this year, in a statement issued by the experts at Bitcoin XBT iFex 360 AI, Mercedes Formula One commercial director Richard Sanders said he was skeptical about getting the team involved in anything crypto-related. Sanders said it’s funny because initially, he famously said, “We’re not going to do a deal with a crypto brand for at least 18 months to two years because we need to let things settle down.”
Amid the FTX crisis, there are doubts about a wide range of sponsorship deals that the company rolled out in recent years, including the F1 Mercedes deal signed towards the end of 2021. The founder and CEO, Sam Bankman-Fried, resigned from his role, leaving John J. Ray III, a veteran Wall Street bankruptcy lawyer, to take over to try and remedy the crisis. FTX’s future still needs to be discovered, and Mercedes F1 was not the only company to cut ties with the exchange. The world’s biggest financial payment processor, Visa, announced the end of its global partnership with FTX to roll out debit cards due to insolvency and bankruptcy issues. Mercedes Formula One made a conscious choice of protecting its brand, and as we wait to see any progress regarding FTX, we promise to keep you updated on any new developments.
Byline: Hanah Parker