Ferrari are set to have $30 million less to play with in 2023, after Velas – a blockchain company that was set to release Ferrari-themed NFTs – parted ways with them.
It was previously reported that Velas terminated the sponsorship deal due to Ferrari failing to allow them to produce the aforementioned NFTs.
However, sources familiar with the matter have now told London Insider that “Velas were looking for any excuse” to get out of their deal with the Italians, as a result of the state of the cryptocurrency market.
The termination of the deal means that Velas branding won’t be seen on the rear-wing of Ferrari’s 2023 challenger, like it was in 2022.
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Like many crypto companies, Velas are in the process of scaling back their marketing campaigns, with the crypto market itself being incredibly unstable.
For Ferrari, losing the deal might not be the biggest tragedy, with Velas’ tokens having decreased in value by 94-percent over the past 12 months.
Crypto sponsorship in Formula 1 is certainly on a rapid decline, almost as fast as companies partnered up with F1 teams in the first place.
A lot of the instability in the market has come as a result of Mercedes’ former crypto partner, FTX, filing for bankruptcy towards the end of 2022, with the crypto exchange site’s founder now being in very hot water.
FTX was regarded as “one of the most credible and solid” companies in the crypto market, according to Toto Wolff.
However, their demise resulted in the future of crypto sponsorship in sport to be questioned.
Wolff even warned the entire F1 paddock after the collapse of FTX that the market remains incredibly “vulnerable”, with the Silver Arrows having been left in “utter disbelief” by how fast FTX became no more.
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“But this situation is very unfortunate. We considered FTX because they were one of the most credible and solid, financially sound partners that were out there,” Wolff said.
“And out of nowhere we can see that a crypto company can basically be on its knees and gone (in) one week. 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 and partners like us that have been left in utter disbelief at what has happened,” he added.