Ferrari has prematurely concluded its partnership with blockchain company Velas, leaving the Scuderia with an estimated $30 million shortfall in revenue for 2023.
The Ferrari-Velas partnership was initiated in 2021 to help promote fan engagement through the use of nonfungible tokens (NFTs) and other collaborative initiatives.
It is rumored that Velas, created in 2019 by crypto entrepreneur Alex Alexandrov, was in breach of its financial obligations with Ferrari.
However, according to sources, the Italian outfit was reportedly noncompliant with clauses that permitted Velas to create NFT images.
Velas' exit from the sport is the latest episode suffered by an F1 team in the incredibly volatile blockchain/crypto space, an industry with players that have been collapsing left and right in the wake of the sensational bankruptcy last year of former Mercedes F1 partner FTX.
While several F1 teams retain links with blockchain or crypto companies, the industry's instability and precarious financial state does not bode well for the future of those teams' partnerships and has heightened everyone's vigilance in the sector.
Velas isn't the only name that will be stripped from Ferrari's bodywork this season, with the Scuderia also parting ways with technology partner Snapdragon.
The Qualcomm affiliate, which markets system on a chip semiconductor products, reportedly contributed an annual $25 million in cash and technical support to Ferrari.
The split between the two companies was mutually agreed.
Overall, Ferrari is facing a $50 million shortfall in sponsorship revenue for 2023, a shortage that will be difficult to make up in the current global economic environment despite Formula 1's marketing attractiveness and continued growth.
Ferrari will unveil its 2023 contender that will be raced once again by Charles Leclerc and Carlos Sainz on Tuesday, February 14th.
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