Crypto exchange Kraken signed a multi-year global pact with Formula One team Williams Racing, marking the trading platform’s first major sponsorship deal even as sports tie-ups with digital-asset firms become increasingly unpopular.
(Bloomberg) — Crypto exchange Kraken signed a multi-year global pact with Formula One team Williams Racing, marking the trading platform’s first major sponsorship deal even as sports tie-ups with digital-asset firms become increasingly unpopular.
Kraken’s logo will be placed on the halo and rear wing of Williams cars for the rest of the 2023 season, as well as on drivers’ and team uniforms, the two sides said in a statement Tuesday. Artists who’ve sold their work via Kraken’s non-fungible token marketplace — a platform for trading tokens that reference unique digital collectibles — will have their NFTs displayed on the cars’ rear wing during some races. The companies didn’t provide details on financial terms.
Formula One has become a hot ticket for crypto companies looking to splash out on high-profile marketing. Hundreds of millions of dollars were spent by companies including Crypto.com and OKX, and all 10 teams had at least one crypto sponsor in 2022. But a months-long collapse in prices, followed by a wave of bankruptcies and scandals, had almost halved the presence of crypto brands at the start of this season.
As the slump accelerated last year, a number of host countries prohibited teams from displaying crypto logos on cars and uniforms and banned companies from promoting their services to fans outside the stadiums.
- Read more: Formula One Feels the Chill of Crypto Winter
Williams Racing hasn’t been immune to crypto’s troubles. The team signed a “multi-year” deal with metaverse platform Terra Virtua in May. But by the end of the year, the company’s logo and branding had quietly vanished from its cars, website and other platforms.
Terra Virtua and Williams came to an agreement to cut ties at the end of last year, according to James Bower, commercial director at Williams, who said the company’s arrangement with Kraken is a much broader partnership. No extra scrutiny was applied to Kraken, he said, unlike rivals McLaren Racing, who subjected their new crypto partner OKX to a heightened level of vetting last year after a previous industry relationship soured.
Kraken is also exploring areas beyond Formula One, the exchange’s Chief Marketing Officer Mayur Gupta said in a joint interview with Bower prior to the announcement. After a challenging year for crypto, Gupta said 2023 seemed like the best time for Kraken to consider sponsorships.
“We were never impulsive,” he said. “During the last bull run, we did not ride the Formula One wave.”
Kraken said in November that it would lay off around 30% of its workforce, affecting 1,100 jobs, and has since shut down offices in Abu Dhabi and Japan. It also settled with the US Securities and Exchange Commission in February over allegations its cryptoasset staking services broke local rules, agreeing to pay a $30 million penalty and discontinuing those products in the country.
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