F1 won’t suffer from “complete mess” triggered by FTX crypto collapse

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The recent bank­rupt­cy of FTX in the wake of an $8 bil­lion liq­uid­i­ty crunch sent pan­ic through the cryp­to mar­kets – which in turn has had an impact on F1 teams.

Eight of the squads on the grid have spon­sor­ship deals with cryp­to firms, with F1 itself hav­ing a major deal with exchange Crypto.com.

FTX was a spon­sor of the Mer­cedes team, and the trou­ble prompt­ed the Ger­man man­u­fac­tur­er to sus­pend the deal on the eve of the Brazil­ian Grand Prix and remove the company’s logos from its car and assets.

The demise of FTX impact­ed oth­er com­pa­nies that had loans or finan­cial arrange­ments with it, and prompt­ed con­cerns about a neg­a­tive impact in the mar­ket amid uncer­tain­ty about the reserves of oth­er major exchanges.

But Brown does not see the need to be too wor­ried about the impact on F1, as he says the cryp­to mar­ket will see its strongest par­tic­i­pants survive.

He was clear that he has no fears about the strength of exchange OKX, which joined forces with McLaren ear­li­er this year.

“We’re very com­fort­able with OKX, and we did a tremen­dous amount of due dili­gence,” said Brown.

“We had a choice on which part­ner to go with, because we had a bunch of approach­es, so we believe we’ve got the best part­ner in the busi­ness. We’re well aware of their back end, their reserves, the deposits, how they oper­ate. So I’m very com­fort­able there.”

Zak Brown, CEO, McLaren Racing, attends the Press Conference

Zak Brown, CEO, McLaren Rac­ing, attends the Press Conference

Pho­to by: Gareth Har­ford / Motor­sport Images

Asked by Autosport if there was a risk of a wider poten­tial impact of the cryp­to melt­down on F1, Brown said: “The FTX [sit­u­a­tion] cer­tain­ly seems to be a com­plete mess.

“I kind of liken it to the inter­net when it got start­ed. You had lots of Inter­net com­pa­nies. Lots did­n’t make it, but then com­pa­nies like Ama­zon came out pret­ty good.

“I think that’ll be the same with cryp­to and blockchain. You just had so many peo­ple rush towards it. And the end result will be a hand­ful, and I don’t know what that num­ber is, of real seri­ous players.

“Every­one that I’ve spo­ken with­in the finan­cial indus­try is very bull­ish on cryp­to and blockchain as a finan­cial instru­ment mov­ing for­ward. And it’s just going to be a case of who are going to be the big play­ers in the space. We’re con­vinced OKX is going to be one of them and they’ve been rock sol­id with us.”

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Brown also reck­ons that doubts about the long-term via­bil­i­ty of cryp­to spon­sors are no dif­fer­ent from scep­ti­cism about oth­er indus­tries that have been involved in F1.

“I think every time there’s been a shift in the sport, there’s, ‘oh my, what’s going to hap­pen when the tobac­co mon­ey leaves the sport? What hap­pens when this man­u­fac­tur­er leaves the sport?

“But the sport is so strong that it seems always to be some­one there to step in. So it would be unfor­tu­nate if there’s a lot of impact, but I think the sport is just fine.”

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