Mercedes to keep FTX logos despite crypto exchange crisis
FTX faces bankruptcy if it cannot raise billions of dollars to get out of a liquidity crisis that erupted at its Alameda Research affiliate this week.
An initial plan for it to be bailed out by rival exchange Binance, which is a sponsor of the Alpine team, collapsed after just 24 hours amid concerns about the scale of the financial hole FTX was facing.
A statement from Binance said: “Initially, our hope was to be able to support FTX’s customers in providing liquidity, but the issues are beyond our control or ability to help.”
Reuters The news agency has reported that the US Securities and Exchange Commission (SEC) is investigating FTX’s handling of customer funds and its crypto-lending activities.
The problems for FTX, one of the most high-profile crypto exchanges in the world, have triggered a meltdown in the crypto markets and pushed Bitcoin to its lowest price in two years.
The FTX exchange’s FTT token crashed from a price of more than $25 earlier this week to a low of less than $2 amid the height of panic selling following news of the problems. It has since made a slight improvement.
FTX’s founder and CEO Sam Bankman-Fried still hopes that a rescue package can be put in place to save the exchange, but there are doubts whether he will succeed or not. This has led to speculation that the partnership with Mercedes may come to an early end.
Lewis Hamilton, Mercedes attend FTX Off The Grid
Photo by: New Revolution Media
At the height of its success, FTX became involved in several high-profile sporting sponsorships. This included a $135 million deal for the Miami Heats’ NBA arena in Miami to be renamed FTX Arena until 2040, as well as being the official cryptocurrency brand of Major League Baseball.
FTX was also linked to the Mercedes team in a multi-year sponsorship deal announced last September. In addition to FTX logos appearing on the car and drivers’ overalls, they have worked together on other projects, including NFT launches.
At this year’s Miami Grand Prix, FTX conducted a major activation, called Off the Grid, on South Beach that included live music and demonstrations of Mercedes cars.
But despite the cloud hanging over the FTX, Mercedes has confirmed that the company’s logos will continue to run on the car and other associated assets for this weekend’s event at Interlagos. However, the team will keep a close eye on developments around the stock exchange as things move forward.
Speaking about the FTX deal earlier this year, amid questions about the risk F1 teams were taking in being associated with the volatile crypto industry, Mercedes boss Toto Wolff said it would be wrong for the series to ignore potential business opportunities.
“You can’t shut yourself down to modern technology,” he said. “It’s definitely an area that will grow.
“Looking back 10 years, having to make payments that take two days and can’t be done outside of week hours is something that is going to be a relic of the past. And this is where cryptocurrencies come in.”
