In wake of FTX's collapse, F1 Team Scuderia Ferrari has terminated a multi-year sponsorship agreement with the Velas Network.
The Ferrari-Velas relationship, which started in 2021 and cost $30 million per year, was designed to increase fan interaction through nonfungible tokens (NFTs) and other joint projects.
According to RacingNews365, the team was not in compliance with provisions that allowed Velas to make NFT images.
Ferrari has also reportedly dropped data analysis partner Snapdragon, resulting in a $25 million decrease in revenue.
Alex Alexandrov, a cryptocurrency entrepreneur and investor, established Velas in 2019. Velas is a chain compatible with the Ethereum Virtual Machine (EVM) that claims to perform 75,000 transactions per second.
Mercedes also suffered a $15 million loss in November when it decided to sever ties with FTX when the latter filed for Chapter 11 bankruptcy.
The esports organization TSM severed its affiliation with FTX on November 16, 2022. Miami-Dade County has asked a judge to release it from an earlier agreement with FTX to refer to the home arena of the Miami Heat as the FTX Arena.
At about the same time, Crypto.com pulled out of a $495 million agreement to sponsor the UEFA Champions League, the premier football club championship in Europe.
Similar fate befell Red Bull Racing's alliance with the Tezos Foundation when the blockchain platform apparently decided not to extend its contract due to strategy misalignment.
Toto Wolff, team principal and CEO of the Mercedes-AMG Petronas F1 Team, warned that similar situations could arise for other teams. However, F1's engagement with the crypto industry extends beyond collaborations.
Formula One filed 'F1' trademarks in October, announcing ambitions to launch an online marketplace for cryptocurrency, meta tokens, digital collectibles, crypto-collectibles, and NFTs.
During the 2022 season, crypto firms flush with cash attempted to court F1's affluent fanbase. Up to 80% of F1 teams had crypto sponsorships in September 2022, with the Formula One Group signing a $100 million contract with Crypto.com.
But several transactions failed after significant crashes that erased $2 trillion from the market capitalization of cryptocurrencies. Significant chunks of the personnel at Coinbase and Crypto.com were let go as key revenue streams were challenged by macroeconomic factors and diminished investor trust.
As investigations uncover the tangle of Bankman-alleged Fried's offenses, the FTX bankruptcy and CEO Sam Bankman-Fried's arrest will result, at least temporarily, in zero advertising spending.
According to marketing intelligence firm SensorTower, Crypto.com's online ad expenses dropped over 90% from Q1 to under $1.6 million in Q3 2022, while Coinbase indicated in its Q3 earnings report that it lowered promotional spending owing to "lower efficiency" in Q3.
While a result, investment in crypto marketing is decreasing as exchanges determine their next move.
