As per a Formula1News report, FTX, a former Mercedes partner has suddenly gone into bankruptcy. The prevalence of cryptocurrency in sports is growing, with some F1 teams now having cryptocurrency-related sponsors.
FTX has just filed for bankruptcy despite the organization seeming to be a profitable and stable platform after having sponsored Mercedes in recent years.
Before the Brazilian GP, which was won by George Russell, the Silver Arrows were compelled to take down all brand images of the cryptocurrency exchange firm on their suits, helmets, and cars due to the company’s inevitable bankruptcy.
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Toto Wolff, Mercedes’ team principal, has now advocated for a far more stringent regulatory requirements for cryptocurrency’s prevalence in Formula 1. He argues that it is ludicrous and unacceptable for an F1 team sponsor to suddenly declare bankruptcy.
Wolff said: “It’s difficult, because we all know that crypto has relevance, I strongly believe in blockchain as a way of transactions in the future, but the situation is very unfortunate.”
“We considered FTX because they were one of the most credible and solid, financially sound partners that were out there, and out of nowhere, you can see that a crypto company can basically be on its knee and gone in one week, and that shows how vulnerable the sector still is,”
“It’s unregulated, and I believe it needs to find its way into regulations, because there’s so many customers, investors, partners like us that have been left in utter disbelief [as to] what has happened.”
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Wolff’s words will serve as a warning to a number of teams in the paddock who rely on partnerships with cryptocurrency firms, including Red Bull, which at the beginning of the campaign inked a record-breaking deal with Bybit.
Despite its unpredictability, cryptocurrency has a significant impact on the sport. Crypto.com is a major sponsor of Formula 1 and has the naming rights to the sprint events, which will be featured six times in the upcoming season.
Losing a sponsor will be awful for Mercedes, who will be aiming to maximize every dollar in their quest to reclaim the top spot in Formula 1 whilst looking to take advantage of the chance offered by Red Bull’s budget cap breach penalty.
