League of Legends developer Riot Games wants out of his estimated $96 million settlement with defunct cryptocurrency company FTX, citing irreparable “reputational damage” in a court filing attached to FTX’s ongoing bankruptcy case.
According to the presentation, via crypto researcher Molly WhiteFTX’s public downfall has negatively affected Riot Games both in reputation and finances, both because of this deal, which gave FTX the title of League of Legends‘ League Championship Series, and due to FTX CEO Sam Bankman-Fried’s personal association with League of Legends. It’s a separate deal from the $210 million sponsorship deal signed with esports team TSM. FTX’s TSM deal, which would be paid off in 10 years, according to The New York Times, was “suspended” in November.
The collapse of FTX and the subsequent arrest of Bankman-Fried, as well as the eight counts of fraud and conspiracy, caused “significant monetary and reputational damage,” Riot Games says. Riot Games’ FTX deal was its biggest sponsorship deal for any of its esports leagues, he said.
“The media and Twitter commenters peppered images of Mr. Bankman-Fried playing League of Legends – Riot Games’ game – at the same time that FTX was crashing,” Riot Games’ lawyers said in the filing.
Bankman-Fried has been open about his love for League of Legends: tweeted last year who is famous for “playing League of Legends while talking on the phone,” saying he gambles a lot more than people “would expect from someone who routinely trades sleep for work.” he continued:: “Some people drink too much; some people bet. I play League.” The FTX settlement only amplifies that association, according to the lawsuit.
This propensity to League of Legends it also reportedly included business meetings. Shortly before FTX’s collapse, investment firm Sequoia Capital published a profile of Bankman-Fried that claimed the founder played League of Legends during an investor meeting that eventually turned into a $200 million investment. (Days after Sequoia’s profile, and after FTX’s public collapse, the company removed his profile.)
FTX also reportedly owes Riot Games a substantial amount of money – $6.5 million by Riot Games’ count. FTX was expected to pay the remainder over six years, according to the lawsuit. In January, FTX was expected to begin quarterly payments for the year, starting at $3.2 million, adding to $12.9 million in 2023. However, Riot Games says that FTX has “provided no guarantees of its willingness or ability to pay.”
The other problem, Riot says, is that the agreement prevents the League of Legends developer to get another crypto sponsor for their upcoming LCS season.
As FTX’s bankruptcy case continues in the courts, Bankman-Friend is expected to appear in court in the Bahamas on Monday, according to Reuters. Reuters reports that Bankman-Fried will accept extradition to the United States, where he has been charged with fraud and money laundering.
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