Formula 1’s Crypto.com sponsor falls apart
If you’ve seen a Formula 1 race this year,There’s a good chance you’ve – albeit unknowingly – seen a lot of Crypto.com ads. Along with companies such as Aramco, DHL, Emirates and Heineken, Crypto.com appears to have become one of the key players in financing the future of global open-wheel motorsport. But right now all the money may be drying up.
A new report from Ad Age‘s Asa Hiken describes a company that has marketed itself in a downward spiral. If you have seen some sporting events lately, you’ve probably seen either a commercial or an event ad for Crypto.com, a cryptocurrency exchange platform. Now it looks like thousands of employees will be let loose as the ‘crypto winter’ descends.
Shortly after Crypto.com announced that it had reached 50 million users – and shortly after serving as the main sponsor of F1’s Miami Grand Prix – the crypto market crashed.
From The age of the ad:
In the months that followed, Crypto.com quietly reduced many of its partnership agreements to gain mainstream attention for the brand, and in some cases the firm has tried to pull out of those deals altogether, according to details shared by former and current company employees who spoke to Ad Age on condition of anonymity.
The exchange also saw a reduction in headcount on a previously unreported scale, with 30% to 40% of its pre-summer workforce leaving the company from June to August – the vast majority of which were due to layoffs, according to former and current employees.
A lack of internal directories prevented Ad Age from confirming exact numbers, as well as distinguishing between layoffs and natural departures, but several sources stated independently that just over 2,000 employees have left the company since the layoffs began. Crypto.com was previously reported to have let go of just over 1,000 employees at most. Marketing staff were some of the first to be targeted by the layoffs, including an entire in-house creative team that was eliminated just months after its creation, sources said.
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In the article, an advertising professional who worked with Crypto.com described the company as follows: “I’ve worked with many ambitious clients before, but Crypto.com is probably the most ambitious client I’ve ever worked with.” That’s because in less than a year, the brand became internationally known thanks to its intense marketing push that made it a massive business. It worked well to get Crypto.com’s name out there.
But a decline in crypto interest caused the platform to fall. Crypto.com has dissolved agreements with Angel City FC, Twitch Rivals and UEFA Champions League. It has maintained several other agreements with sports teams or events, but in some cases has reduced the number of hospitality packages available.
Right now, the future of Crypto.com and cryptocurrency as a whole is a bit unclear. It obviously hasn’t become a universally accepted form of currency, and the initial allure seems to have faded. It may continue to fall, or it may see another surge in interest. Formula 1 probably won’t fall apart thanks to Crypto.com – but it’s another fascinating chapter in the sport’s long history of accepting sponsorship deals that aren’t quite cut out to deliver on their promises.
