FTX Collapse Will Have Adverse Affects On F1 Teams: Mercedes Team Head
- Toto Wolff, the CEO of Mercedes-AMG Petronas F1 Team, stated that many F1 teams could be affected with FTX collapse.
- Wolff remains a firm believer in blockchain and crypto space but was in “utter disbelief” when the multi-billion dollar firm collapsed.
- The executive added that the implosion of the crypto exchange shows how much the industry needs regulation.
- Mercedes has removed FTX from its cars and other assets after abandoning the partnership with the exchange.
The CEO of Mercedes-AMG Petronas F1 Team, Toto Wolff, has stated that the collapse of the former multi-billion dollar crypto exchange FTX can adversely affect many F1 teams. During its dominance as one of the largest crypto firms across the earth, the trading venture of Sam Bankman-Fried (“SBF”) made several marketing deals to attract the attention of investors.
One of the deals was done with the Mercedes-AMG Petronas F1 Team and the logo of FTX was displayed on the cars that were driven by some of the most popular and well-known racers across the earth, including Lewis Hamilton and George Russel. Interestingly, Mercedes ended the partnership with the exchange in early November when it filed for bankruptcy and protection from creditors.
In an interview, the Mercedes F1 team’s boss stated that many teams were connected with FTX and the collapse of the exchange could ignite a fire which would bring these teams trouble.
“Each team has such sponsors and the F1 organization as such. So everyone would be affected. FTX was considered a solid company, whose bankruptcy is a huge damper not only for us, but for the entire crypto industry. This bankruptcy, with a $ 8 billion shortfall, shows that the entire industry is uncontrolled,” said Wolff.
FTX showed signs of troubled when the CEO of the world’s biggest crypto exchange Binance, Changpeng Zhao, stated that he would sell his firm’s stake of FTX Token (FTT). This caused a panic in the market which led to many people selling their tokens. Interestingly, almost all of the exchange’s worth was in FTT and in one day, the platform saw an outflow of $4 billion. This eventually led to a liquidity crunch leading to the exchange filing for bankruptcy and Binance backing out from an acquisition deal.
Mercedes announced that it would cut all ties with the exchange, and Wolff said at that time that the automobile firm was in “utter disbelief” and added that the sector needs regulation. The F1 team removed FTX from the cars and other assets. However, Wolff said that he remains a firm believer in crypto and blockchain technology.
Wolff said that the crypto space is unregulated and added that “it needs to find its way into regulations because there’s so many customers, investors and partners like us [Mercedes] that have been left in utter disbelief at what has happened.”
“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,” Mercedes announced earlier.