Formula 1

Back on track: Kraken inks F1 crypto sponsorship deal with Williams Racing

Kraken has inked a partnership deal with Williams Racing marking the first major return to F1 for crypto this year.

Formula 1 teams could be warming to crypto advertising again despite a crypto sponsorship exodus in the wake of last year’s high-profile meltdowns.

On March 28, American crypto exchange Kraken announced that it was partnering with the Williams Racing F1 team in a new sponsorship and Web3 deal. The move marks the first major crypto company to ink a new deal in Formula 1 racing this year.

The deal will not only involve Kraken branding emblazoned on the Willams race cars, but branded team merchandise and nonfungible tokens (NFTs) for team fans to collect.

The rear wing of the car will also showcase KrakenNFT customer-owned digital collectibles artwork from leading third-party NFT projects at select races.

Williams Racing commercial director James Bower said, “We’re excited to get the partnership underway to offer our fans cutting-edge crypto and Web3 experiences, while also enabling Kraken to reach new institutional clients and businesses through our network and events.”

Several Formula 1 racing teams quickly dropped their crypto sponsorship deals when things started to melt in late 2022. In mid-November, the Mercedes F1 team suspended a partnership agreement worth an estimated $27 million with the embattled FTX exchange.

Furthermore, Ferrari abruptly ended a long-term arrangement with the Swiss blockchain organization Velas in January. Alfa Romeo dropped its sponsor, Vauld, following troubles at the crypto lender last year.

In September, Singapore put the brakes on crypto advertising around the track but allowed it to remain on the cars. Other countries including France also placed restrictions on trackside crypto commercials last year forcing some teams to remove them.

Related: Merch and perfume: Formula One trademark filing paves the way for F1 NFTs

However, some sponsorship deals have remained. The Aston Martin team has retained its crypto sponsors, Crypto.com and Socios. Binance remains the partner of the Alpine team and OKX and Tezos are still with McLaren Racing, according to reports earlier this month.

Meanwhile, the Red Bull racing team has retained its crypto sponsor Bybit and OpenSea is still with Haas.

Source: Bloomberg

Kraken’s deal with Williams Racing could be the beginning of a return to racing and sports for crypto companies in 2023 as markets recover.

NFT rides shotgun as Red Bull Racing closes out F1 season

Red Bull Racing will close out a successful Formula 1 season with an NFT emblazoned on both drivers’ vehicles at the Abu Dhabi Grand Prix.

Cryptocurrency and blockchain technology firms continue to feature in the world of Formula 1, with a nonfungible token (NFT) making its mark on Red Bull Racing’s vehicles to close out the 2022 calendar.

Red Bull Racing dominated the F1 season, topping the constructors’ standings, while Max Verstappen closed out the drivers’ standings for a second consecutive season. With the curtain closing on 2022’s race schedule in Abu Dhabi on Nov. 20, the team’s cars will feature an NFT on their livery in what is being called a first in F1.

Red Bull Racing struck a deal with cryptocurrency exchange Bybit as a principal team partner in February 2022, one of a handful of cryptocurrency firms sponsoring teams in Formula 1. The exchange’s logo will feature alongside Lei the Lightning Azuki, an NFT artwork and character from the anime-inspired Azuki collection.

The original Lei Azuki NFT is one of 10,000 NFTs from the collection. The #8494 is currently listed on OpenSea and is valued at around 9 Wrapped Ether (wETH), or $11,100 at the time of writing.

Related: Merch and perfume: Formula One trademark filing paves the way for F1 NFTs

Red Bull Racing’s Lei the Lightning Azuki will be a limited edition version of #8494 and is set to be minted on the Tezos blockchain and available through Bybit’s NFT marketplace.

A statement from Red Bulls Racing’s team principal, Christian Horner, highlighted the ongoing exploration of Web3 use cases through the partnership in the sporting world

“In many ways, it’s been an eye opener for us to the vast opportunities Web3 has to offer. This unique project is the perfect combination of creativity, innovation, and passion which matches our ethos on the track.”

The sport of Formula 1 has been a big proponent of the cryptocurrency space. Crypto.com signed a major sponsorship deal in June 2021 as its official cryptocurrency and NFT partner. Fan token blockchain platform Chiliz has also partnered with a handful of F1 teams over the past two years.

McLaren became the first team to carry out a ‘livery takeover’ with their main sponsor OKX in 2022. Cointelegraph had an exclusive interview with Australian driver Daniel Ricciardo about the partnership at Token2049 in Singapore in October 2022.

Formula 1 also filed a number of trademark applications in October 2022 that suggest that the organization is looking to take full control of the intellectual property in the wider cryptocurrency space.

Esports team TSM suspends $210M sponsorship deal with FTX

TSM confirmed that it remains “strong, profitable and stable” despite its decision to suspend the sponsorship with FTX.

Professional esports organization Team SoloMid (TSM), previously TSM FTX, has suspended its $210 million sponsorship deal with the now-bankrupt FTX crypto exchange “effective immediately” following the cryptocurrency trading platform’s shock collapse last week.

The United-States-based esports organization made the announcement in a Nov. 16 tweet to its 2.2 million followers, adding that the decision was made after “monitoring the evolving situation and discussing internally.”

The $210 million deal was put to paper in June 2021, which resulted in the renaming of TSM to TSM FTX. At the time of the deal, the esports organization said it would allocate its new resources to all corners of the globe by opening offices in Asia, Europe and South America, according to Esports insider.

TSM also purchased $1 million worth of FTX’s native token, FTX Token (FTT), which was distributed to players and employees. 

Following FTX’s collapse last week, TSM, in a Nov. 13 tweet, said the firm was discussing its legal counsel “to decide the best next steps to protect our team, staff, fans and players.”

In its most recent announcement, TSM said its partnership suspension with FTX means that FTX branding would be scraped off TSM’s official name, team and player social media profiles and jerseys, stating:

“This means that FTX branding will no longer appear on any of our org, team and player social media profiles, and will also be removed from our player jerseys.”

TSM also took the opportunity to confirm with its stakeholders that its balance sheet remains intact and would be so for the foreseeable future without FTX’s support:

“TSM is a strong, profitable and stable organization. We forecast profitability this year, next year and beyond. The current situation with FTX does not affect any part of TSM’s operating plan, which was set earlier this year.”

TSM is most well known for its participation in League of Legends, one of the largest multiplayer online battle arena video games that is played competitively. TSM also fields players in the online games Dota 2, Apex Legends and Valorant.

TSM isn’t the only company to have struck off a massive sponsorship agreement with FTX following its collapse.

The NBA’s Miami Heat took things one step further than TSM in announcing to terminate its business relationship with FTX in a Nov. 12 Twitter post:

The Miami Heat added that they’re looking to find a new naming rights partner for the arena, which was officially renamed to FTX Arena in March 2021 following a 19-year sponsorship agreement worth $135 million.

Related: FTX collapse: The crypto industry’s Lehman Brothers moment

The Mercedes Formula 1 team was another sports team to suspend its sponsorship with Sam Bankman-Fried’s fallen empire, which was announced shortly after FTX filed for bankruptcy on Nov. 14.

Grand Prix 247 reported that in a recent video call, the CEO of Mercedes’ Formula 1 team, Toto Wolff, stated that while he still believes in the long-term prospects of blockchain and cryptocurrency, FTX’s collapse provided a textbook example of the many vulnerabilities still present in the industry:

“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.”

“Out of nowhere we can see that a crypto company can basically be on its knees and gone one week. That shows how vulnerable the sector still is,” the executive added.

But not every sports organization with a business affiliation to FTX has pulled the pin yet.

The Major League Baseball (MLB) is currently in discussing with its legal counsel about what the best course of action is, according to SportTechie.