As the crypto adoption rate increases globally and the buzz around the crypto industry grows, we’re seeing a lot of entities forming different relationships with crypto firms around the world. One industry that particularly sticks out in this regard is the global sports industry. It’s becoming more and more popular for major sporting brands and sportspeople to partner with crypto firms.
Recently the sporting industry has seen significant deals like cryptocurrency exchange, OKX partnering with English Premier League winners, and Manchester City to be the team’s official sponsor for their 2022/23 training kit. Another example of lucrative partnerships between the crypto industry and sports industry can be seen in the collaborations between motorsport giant, Formula 1, and various different cryptocurrency firms as reported by the popular cryptocurrency trading tool Bitcoin Smarter. A major one of these partnerships is between Formula 1 and cryptocurrency platform, Crypto.com. The crypto platform has been a notable sponsor of Formula 1 since the 2021 Formula 1 season.
This partnership is a significant one for Crypto.com considering the Formula 1 industry is worth approximately $2 billion with an impressive following of around 445 million viewers around the world. Recently though, many countries have been clamping down on regulations regarding digital assets and the crypto industry. The effect of this can be seen in Crypto.com’s involvement with Formula 1 in recent weeks. The French Grand Prix brought with it complications for the various crypto sponsors as French advertising regulations interfered with their sponsorships. Multiple crypto sponsors of this major sporting event were permitted from using their branding at the actual event causing friction for these partnerships.
France has long been known for its rigorous regulations regarding the promotion of different products, with crypto being the latest target of French advertising regulations. During the French Grand Prix weekend, several F1 teams were obligated to cover up or remove decals featuring branding by crypto-related products and services. As it stands currently, eight out of the ten Formula 1 team are in some way affiliated with either one or more crypto firms, with Haas and Williams being the two exceptions. Alfa Romeo has partnered with both crypto lender, Vauld and meme cryptocurrency Floki. Red Bull Racing has partnerships with a cryptocurrency exchange, by bit, and an open-source blockchain, Tesoz, which they share with the McLaren team. The most significant shared partnership is that of Formula 1 and British team, Aston Martin who both have deals with Crypto.com.
Many teams were forced at short notice to adhere to legal advice pertaining to what is permitted in France by the Autorité des Marche Financiers (FCA) which regulates internal financial markets. One needs to factor in that some brands, such as Alpine sponsor, Binance, consist of trading exchanges and some form of cryptocurrency making the matter extremely intricate. AlphaTauri and Alpine decided to remove all forms of crypto branding for the French Grand Prix with the Alpine spokesperson confirming that the team avoided “any advertising on French soil” referring to their crypto sponsor, Fantom Foundation. Due to the vagueness of the regulations set out by the AMF, several teams did not remove crypto branding. Ferrari, Red Bull Racing, Mercedes, and McLaren proceeded to move forward with their crypto branding expressing that they had discussed the matter with their legal teams.
The AMF has since announced that it intends to work with France’s Professional Advertising Regulatory Authority to amend its existing regulatory framework to include crypto-related advertisements. The French regulator has opened the floor for recommendations on token offering ads. The AMF has also expressed that digital asset service providers should include information about the possible risks of crypto investments for its users. It should also be noted that France isn’t the only country facing this issue, the UK’s Advertising Standards Authority has also banned certain ads from firms including Coinbase, Kraken, and Crypto.com for allegedly “failing to illustrate the risk of the investment”.
With many countries like the UK and France enforcing strict regulations around the advertising of cryptocurrency products and services, the legalities regarding crypto partnerships are becoming quite intricate. So far, however, this hasn’t stopped major sporting brands from partnering with various crypto firms.