Ferrari, ahead of the upcoming Formula One racing season, has terminated its partnership with the Velas blockchain. Scuderia Ferrari, the racing division of the Italian luxury sports car brand, reportedly backed out of complying with provisions that were required before Velas could create NFTs for the company. Ferrari now stands to face losses of around $55 million (roughly Rs. 452 crore) in the aftermath of suspending its blockchain partnership, as well as cutting ties with chipmaker Snapdragon, that was also roped-in amongst its sponsors last year.

In a bid to engage with new-age fans and reward loyalists with digital souvenirs, Ferrari had partnered with Velas in 2021. The deal, that was supposed to be multi-year, was set at a yearly price of $30 million (roughly Rs. 246 crore).

The deal not only fell apart due to Ferrari’s lack of participation, but also because of the ongoing crypto slump that has struck Velas in the belly of its business.

As per a report by RacingNews365, Velas has claimed that it has been subjected to a financial breach in this partnership.

Founded in 2019, Velas was created by two crypto entrepreneurs Alex Alexandrov and Farkhad Shagulyamov, and the brand is headquartered in Zug, Switzerland.

The blockchain firm, along with Ferrari, is now contemplating official legal ways to part ways amicably.

The branding of Velas that was displayed on the F1-75 car, will soon be dropped.

As far as Ferrari’s partnership termination with Qualcomm’s Snapdragon is concerned, the reason for this ‘mutual decision’ reportedly remains unclear. The chipmaker was paying Ferrari $25 million (roughly Rs. 205 crore), for promoting the company while also offering technical assistance to the car-maker.

Ferrari has been among other high-end car makers, that tapped into the blockchain and NFTs sector, looking to devise ways to connect with their fans.

Mercedes, for instance, also hopped on the crypto-wagon after it inked a sponsorship deal with the FTX crypto exchange in September 2021. The partnership automatically fell apart after the FTX exchange collapsed last year and ended up filing for bankruptcy.

Amid the ongoing downturn of the overall crypto market, Red Bull Racing’s partnership with Tezos Foundation also crumpled in December 2022 after the latter decided not to renew its deal citing changes in its ‘strategical priorities’.

For now, it remains unclear as to what kind of a visibility will the crypto and blockchain projects garner this year during the 2023 Formula One racing season, that is slated to commence on March 5.

Formula One has tried to be on the forefront of adapting its fans and followers to the crypto culture for a while now. In October last year, the international car racing federation had opened about wanting to launch a marketplace for NFTs and other forms of blockchain-based offerings.