The Mercedes Formula 1 team has suspended its sponsorship deal with FTX, one of the world’s largest cryptocurrency exchanges. FTX has effectively collapsed after reports came to light alleging that the exchange might not have as much money as claimed. The exchange is now on the verge of bankruptcy and is the subject of an investigation by U.S. federal authorities.
Mercedes-AMG Petronas F1 Team has confirmed to Autosport that it has suspended its deal with FTX and removed the exchange’s logo from its cars. Initially, the team indicated that FTX’s logo would remain on the car for this weekend’s São Paulo Grand Prix but reversed the decision this morning as the situation evolved. The team has stated, “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.”
Speculation surrounding the exchange’s liquidity plummeted the value of FTX’s own token, and FTX halted withdrawals on Tuesday. A proposed acquisition of FTX by Binance, a rival exchange, has also fallen apart which sparked a downturn of the entire cryptocurrency market. Reuters reported that FTX is rushed to find $9.4 billion in investment to bail out the exchange. The U.S. Department of Justice and the Securities and Exchange Commission are now investigating FTX.
Mercedes signed a multi-year agreement with FTX late last year. Seven other Formula 1 teams have sponsorship agreements with crypto-related companies, including the Alpine F1 team’s agreement with Binance. It’s not clear how FTX’s current dire situation will impact the landscape of crypto sponsorships in Formula 1 and across all major sports.