The Mercedes Formula 1 team says it has suspended its partnership with in-crisis cryptocurrency exchange FTX “as a first step” ahead of the Brazilian Grand Prix.
The Silver Arrows had partnered with the company, a Bahamas-based exchange headed by 30-year-old American entrepreneur Sam Bankman-Fried, last year.
It is one of many F1 teams to dip into the crypto scene for sponsorship, with main rivals Red Bull and Ferrari having partnered with Bybit and Velas respectively, while F1 itself has had Crypto.com as a sponsor for over a year.
But, seemingly paired with revelations about the state of FTX’s holdings and their dependence on its native token FTT, a so-called ‘liquidity crunch’ amid mass user withdrawal attempts has reportedly brought the exchange to the brink of collapse.
FTX suffered what the Associated Press called “the cryptocurrency equivalent of a bank run” as customers “became concerned about whether FTX had sufficient capital”.
According to Bloomberg, Bankman-Fried – whose fortune has widely been reported as wiped out – “warned of bankruptcy if he can’t secure capital to cover a shortfall of as much as $8billion”. The firm subsequently entered the Chapter 11 bankruptcy process “in order to begin an orderly process to review and monetise assets for the benefit of all global stakeholders”.
Bankman-Fried is now “being investigated by the US Securities and Exchange Commission” according to Bloomberg and has resigned as CEO, while the company may be about to lose its Cyprus licence that allows it to operate in most of Europe.
A mooted buyout from rival cryptocurrency exchange Binance – which is partnered with Alpine – came to naught.
Mercedes was promoting its FTX-linked collection of crypto assets – ‘NFT Ticket Stubs’ – on social media as recently as a couple of days ago, but has now said: “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 closely the situation as it evolves.”
The partner page on the F1 team’s site for FTX now returns a “no longer exists” message.
