Mercedes Formula One was skeptical of crypto sponsorships. Now it’s racing to drop FTX

 

By Jeff Beer

November 11, 2022
 

The Mercedes Formula One team, home to seven-time world champ Lewis Hamilton, announced it has suspended its partnership agreement with the troubled cryptocurrency exchange FTX.

Earlier this year, in an interview for a story on FTX’s rise in sports sponsorship, Mercedes Formula One commercial director Richard Sanders told Fast Company that he was skeptical about getting the team involved in anything crypto related. “It’s funny, initially, I famously said, ‘We’re not going to do a deal with a crypto brand for at least 18 months to two years because we need to let things settle down,” Sanders said in comments not previously published. “There’s a lot of hype, and it’d be good to know when the winners are clear.’”

However, at the time, the hype won out. “Two weeks later, someone in my team said, ‘It’s pretty obvious the winners are getting clear,’” said Sanders. “We can’t wait 18 months to two years, if we’re conservative here we’re going to end up not having a good deal for Mercedes F1.’”

Sanders said that the team’s due diligence was a long process. While evaluating potential crypto partners—which also included Binance, Kraken, and Coinbase—Sanders said they were most concerned with who was the responsible entity if things didn’t go as planned.

Mercedes Formula One was skeptical of crypto sponsorships. Now it’s racing to drop FTX

“Who were the responsible directors with a fiduciary duty that you can pin down? With almost all of them, FTX was definitely the best in that regard,” said Sanders. “Almost all of them—and I’m talking about the big ones, Binance, Coinbase—it was so decentralized by design, and we understand why, but it does bring up potential issues when you’re asking what happens if things don’t go well? We spend a lot of time on making sure those hard questions are answered . . . Which of these players had the most aggressive approach to regulation? Which wasn’t going to take our good name and accidentally drag us into some issues?”

As the team prepares for the Sao Paulo Grand Prix race in Brazil this weekend, all FTX branding will be removed from Mercedes team cars and uniforms. The cryptocurrency exchange has been embroiled in a liquidity crisis that snowballed out of control this week. On Friday, it said it was filing for bankruptcy protection and that its founder, Sam Bankman-Fried, is stepping down.

Fast Company

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